… as Ghana Tech Lab launches free business advisory service
Head of SME Banking at Absa Bank Ghana, Audrey Abakah, has entreated owners of thriving small businesses to maintain active bank accounts – saying that it is a crucial component for accessing rapid financing facilities.
While the rise of digital payment platforms outside the banking system’s scope have their merits, she argued that the lack of financial records with banks would make it impossible for them (banks) to extend credit to small businesses, especially when they are beyond the nascent stage and ready for further capital injection.
Speaking at the Start Up Business Advisory Service (StartUp BAS) launch hosted by Ghana Tech Lab with funding from Absa, she said this is crucial for small businesses, particularly startups, as there are increasingly more tailor-made products available from banks for them which require little collateral but are heavily dependent on evidence of financial activities.
“Most SMEs make a great mistake by transacting solely with cash. They pay suppliers in cash, their distributors pay them in cash; and at best they have their transactions conducted through mobile money platforms, but fail to route it through the banks.
“When that happens, we don’t get the opportunity to view their periodic credit average turnovers and have nothing to analyse to get a fair idea of how the business is performing. This is critical as almost all the decisions we take in financing businesses are based on their financial performance, which their accounts give evidence of,” she explained.
She further tasked business owners to be meticulous with their overall record-keeping even beyond finances, saying that this could be the differentiating factor between startups that break the five-year ‘incubation period’ barrier and those which go extinct.
She added that this would be bolstered by small-business owners making the extra effort to conduct research and due diligence.
Taking his turn, co-lead at Ghana Tech lab, Jorge Appiah, stated that the idea for StartUpBAS was born out of a realisaton that with increased avenues for access to finance, many nascent businesses still struggle to grow – and this was the result of lacking appropriate business advisory services, due to a lack of information as to who to contact or inadequate finances to pay for such services.
“We have realised that startups don’t just need financing to grow. One of the primary things they need is the business advisory support that will help build their capacity and strengthen their acumen to effectively manage their business and be more sustainable,” he stated.
The programme, which will be run in collaboration with other tech-hubs across 13 regions, seeks to provide startups with free and easily accessible business development support.
