Small and medium-scale businesses in the country are set to benefit from financing and technical support to propel economic growth and development as the Ministry of Finance has revealed plans to launch the first phase of the SME GO initiative.
The program dubbed the SME Growth and Opportunity (SME GO) Programme spearheaded by the Government of Ghana will be managed by the Ghana Enterprises Agency, Development Bank Ghana (DBG) and the Ghana EXIM Bank.
The programme is targeted at dealing with the financial challenges faced by the SMEs which mainly include high cost of credit and strict collateral system barring these businesses from accessing credit to expand their businesses. With this programme, SMEs will benefit from low-cost financing through loans and grants.
The first phase of the programme will disburse about GHC 8.2 billion to these SMEs at an interest rate of 9% with ample time for repayment which mainly funded by the Government of Ghana, DBG, and Ghana EXIM Bank, the Finance Ministry said.
Management skills and financial literacy including language skills are some of the technical and capacity support the programme will offer to beneficiaries to improve operational efficiency and create sustainable jobs.
Speaking at the Quarterly Economic Roundtable organized by the Institute of Statistical Social Economic Research at the University of Ghana (ISSER) and the Ministry of Finance, a representative from the Ministry, Emmanuel Sackey indicated that this programme in the long-term is also aimed at enhancing the business environment for SMEs to flourish.
Emmanuel Sackey further revealed that the programme is not a wholesale initiative but will target only high-earning small and medium businesses. SME GO, he said is targeting businesses with a turnover of GHC 18 million and below.
Minister for Finance, Dr. Mohammed Amin Adam stressed that the SME GO programme has become the priority of government after the completion of the negotiations on the country’s debt through the Debt Restructuring Programme.
The Minister indicated that given the crucial role SMEs play in the country’s economy, it is important for the government to target these businesses as a catalyst for recovery and growth.
92% of all registered businesses are SMEs. In addition, 85% of all manufacturing jobs are created by the SME sector which also contributes about 70% to the country’s overall Gross Domestic Product (GDP).
With the crucial role played by the SME sector in Ghana’s economy, the government is convinced a push to the sector is a direct push of the country’s economy which will create jobs and growth needed to transform the national economy.
