The Bank of Ghana (BoG) has called on financial service providers to revise and develop new financial solutions and models that particularly serve women-led businesses to engender greater financial inclusion.
This is against the understanding that prioritising SME development, especially among women, is critical for promoting inclusive economic growth.
According to the Deputy Director Banking Supervision Department-Bank of Ghana, Ismail Adam, SMEs play a critical role in promoting economic growth and sustaining economies globally.
He observed that in most developing economies SMEs form the bedrock of socio-economic development, contributing significantly to GDP, job-creation and improved livelihoods. For instance, in Ghana SMEs form about 92 percent of all registered businesses, and thus are seen as the driving force behind any resilient national economy, he added.
However, despite the contribution of SMEs to economic development, he noted that their access to finance remains a key constraint.
Aside from the financing gap, he said: “SMEs, particularly women-led SMEs, face several additional challenges to start and build a business – including unwritten social and cultural norms, lack of awareness about legal rights, lack of economic and training opportunities among other constraints”.
Given this development, the Deputy Director asserted that effective policies which facilitate access to credit for women-owned/led enterprises require a clear understanding of these constraints for them to work effectively.
Mr. Adam was speaking at a project learning conference organised by Sinapi Aba Savings and Loans Trust, and encouraged stakeholder engagements on addressing the challenges of women-led SMEs in order to consider all the key factors and make inroads.
The project learning conference was on implementation of the ‘Financial Inclusion for Enterprise Development (FINEDEV)’ programme for women by Sinapi Aba and its partners – Global Affairs Canada and Opportunity International Canada (OIC).
He said while the BoG’s mandate generally focuses on price as well as financial stability, it has also made room for financial innovation and inclusion.
“Regulatory frameworks, when carefully designed, can promote financial stability on one hand, while ensuring that businesses, households and individuals at the lower end of the market gain access to critical financial services and products through financial innovation.
“One of the means through which the Bank of Ghana has used regulation to promote financial inclusion and innovation in Ghana was opening-up the electronic money space to non-banks and FinTech partnering banks,” he said.
This, he noted, has led to increased access to financial services and products for previously underserved groups, especially women.
The Chief Executive of Sinapi Aba, Tony Fosu, said FINEDEV focuses on supporting some selected women – initially 18,000 – who operate micro-small businesses to grow their business to SME-level.
As part of the programme, he said, they are provided with financial services and taken through mentorship programmes, among others, to achieve ultimate business transformation while impacting their households and societies.
He indicated that the five-year project is anticipated to impact over 200,000 women-led SMEs in the next 10 ten years.
The Chief Executive of Opportunity International-Canada, Dan Murray, acknowledged that FINEDEV is also supported by Global Affairs-Canada, and notes that the programme has created a pathway out of poverty for beneficiaries.
“It touches us to see the direct impact in the lives of clients who have found sustainable pathways out of poverty. The ultimate goal is that clients acquire sustainable livelihoods so they can provide a brighter future for their families, and take the next step of creating jobs for others to benefit,” he said.