President Nana Addo Dankwa Akufo-Addo has urged potential beneficiaries of the GH¢1billion loan support scheme set aside for businesses to endeavour to invest the monies in their work and bring the economy back on track from impacts of the coronavirus pandemic.
According to the president, the outbreak of coronavirus has affected global economies, including Ghana, which has since witnessed a drop in productivity, job losses, revenue loss of businesses and individuals, as well as a steep decline in government revenues.
However, among those worst-affected, he said, are Micro Small and Medium Enterprises (MSMEs) which account for 70 percent of Ghana’s Gross Domestic Product (GDP) while also forming about 92 percent of businesses in the country.
It is against this backdrop that he said the Coronavirus Alleviation Programme (CAP) was introduced, “with an objective to protect households and livelihoods; support micro, small and medium-scale businesses; minimize job losses; and source additional funding for promoting industries.
“Out of the GH¢1.2billion earmarked for this programme, GH¢600million will be disbursed as soft loans to MSMEs with up to one-year moratorium and a two-year repayment period. The rate of interest on government’s GH¢600million facility is 3 percent.”
President Akufo-Adddo was speaking at the launch of the ‘CAP Business Support Scheme’, and disclosed that selected participating banks will provide negotiated counterpart funding of GH¢400million.
He explained that the scheme is meant to engender compassion and hope, “the pillars on which we will build post-COVID-19 Ghana. I’m confident that the proper application of these funds will help our nation to bounce back stronger and better than before,” he stated.
He observed that the business support programme is an integral part of the resilience and recovery plan that is being instituted by government to ensure the renewal of economic activities and sustenance of livelihoods. “We are determined to protect as many jobs as possible, and to help as many businesses as possible get back on their feet.”
It came up that disbursement of the funds, to be done by the National Board for Small Scale Industries (NBSSI), will be supervised by a ‘Loan Committee’ that will be constituted by a representative each from the Ministry of Finance, Ministry of Trade, NBSSI and the participating banks. The world-renowned auditing firm KPMG is expected to act as technical advisor to the scheme.
The president said: “Transparency and accountability will be hallmarks of the scheme’s operation.” The scheme targets MSMEs in both the formal and informal sectors which have been affected by the economic downturn resulting from the outbreak of COVID-19.
MSMEs in growth sectors that require additional capital to expand their business to meet growing demand for COVID-19-related goods and services can also apply. These include agri and agro businesses, manufacturing, water and sanitation. The others are tourism and hospitality, education, food and beverages, technology, transportation, commerce and trade, healthcare and pharmaceuticals, and textiles and garments.
Application for the loan is made online and other portals for businesses, as well as offices of the NBSSI. Beneficiaries are required to be either self-employed, sole-proprietors engaged in a limited liability partnership or joint venture arrangement among others. Smaller enterprises are entreated to access funds from Adom Micro Loans, whereas larger businesses can apply to the ‘Anidasuo Soft Loans’.
The Executive Director of NBSSI, Kosi Antwiwaa Yankey- Ayeh, acknowledged that the introduction of this initiative will bring hope and relief to Ghanaians businesses which have been worst-affected by the pandemic. She noted that as part of activities leading to creation of the scheme, over 70 sector associations and trade groups were engaged.
She said among other things that the disbursement will be made by mobile money transfers or directly into accounts. Mrs. Yankey- Ayeh also said: “The associations and financial institutions which own the credit risk will monitor those that are their clients’ with support from NBSSI.”
The NBSSI, through its Business Advisory Centres – in total 178 as well as private business development partners, is expected to work assiduously on engaging the MSMEs to build their capacity and resilience in these times, she added.