The Ghana Association of Savings & Loans Companies (GHASALC) has asked government to channel the disbursement of the GH₵600m through their members for onward distribution to the Small and Medium-Scale Enterprises (SMEs).
GHASALC says it is making this call because it has the structures to ensure that the monies are used for their intended purposes and repaid when they are due.
“We have the offices around the country. We have the processes, structures for appraisals and the recovery of the loan itself.
“Some clients are over indebted which we have the database to check to know that somebody is over indebted”, the Executive Secretary of the Association, Mr Tweneboah Kodua said in an interview with Joy News on Monday, May 11, 2020.
As part of efforts to mitigate the economic impact of the Covid-19 pandemic on businesses in the country, President Akuffo-Addo, on Sunday, April 5, 2020, announced a GH₵600 million stimulus package to support to micro, small and medium scale enterprises (SMEs) as “soft loans scheme”.
This is part of the Coronavirus Alleviation Programme (CAP) to manage the socio-economic impact of the COVID-19 pandemic.
This, according to the President, will be done in collaborations with the National Board for Small Scale Industries (NBSSI), Business and Trade Associations as well as Rural and Commercial Banks.
The loan, he said, will however have a one-year moratorium and two-year repayment period.
Number of SMEs to benefit
On Tuesday, the Executive Director of the National Board for Small Scale Industries (NBSSI), Kosi Yankey, announced that over 200,000 Small and Medium-Scale Enterprises will benefit from the government stimulus package announced some months ago
Speaking at the Ministry of Information organized Covid-19 press briefing, Madam Yankey said her outfit will select the beneficiary companies from the three categories of the micro, small and medium enterprises in Ghana.
She explains that statistics on the SMEs sector of the country shows that 80 percent of the populations into the micro sector, 15 percent in the small-scale sector while one percent are in the medium enterprises.
In view of this, the NBSSI rep says their analysis of the statistics indicated that about 200, 000 businesses will benefit from the stimulus package, “considering the fact that the micro businesses make up a huge chunk of the population”
“So, we’ve divided it up in a way that it is representative of the population of the entire sector”, the NBSSI rep added.
She further added that the NBSSI will soon launch a website where interested SMEs could login to submit their applications for the stimulus support.
Regularise the SME sector
This afternoon, it has been reported that the NBSSI is testing the modalities it intends to use for assessing and disbursing the stimulus package to the SMEs.
While players in the SME sector awaits the modalities, GHASALC says it believes channeling the money through its members will help regularize many small and medium-scale businesses in the country.
This means that SMEs will be roped into the banking sector, he explained.
Again, Mr Kodua added that “we have the system and the structures to ensure that if somebody is going wayward we are able to bring the person back on line”.
Mr Kodua further stated that using GHASALC as conduits for the disbursement will also improve the liquidity of the position of the Savings & Loans companies in the country.
Mr Kodua while commending government for taking steps to support SMEs in the wake of the coronavirus urged it to include them in the process.
“If come to Ghana and you want to support SME development and you ignore Savings & Loans companies then you are not actually doing what you want to do”, he said.
By Salifu B.B. Moro