By Ebenezer Chike Adjei NJOKU ([email protected])
Consolidated Bank Ghana’s (CBG) Managing Director, Daniel Addo, issued a clarion call for a more concerted national commitment to empowering small and medium-sized enterprises (SMEs).
He emphasised prioritising resource allocation, productive capacity-building, human capital investment and fostering an enabling environment for this critical sector.
“It stands to reason that we, as a country, should commit resources to this sector, build productive capacity, invest in human capital and create an environment for the sector to thrive,” Mr. Addo stated during a media interaction at the CBG Head Office following the listing of Kasapreko Co. Plc.’s GH¢600million Series 1 Note on the Ghana Fixed Income Market (GFIM).
His plea resonated with global statistics, highlighting the transformative power of nurturing SMEs. The World Bank reports that SMEs contribute up to 60 percent of global employment and 50 percent of the global gross domestic product (GDP).
Furthermore, studies by the International Labour Organization (ILO) reveal that SMEs create up to 70 percent of new jobs globally, while the World Bank reports that every US$1 invested in an SME generates up to US$3 in return for national GDP.
In Ghana, where SMEs represent over 90 percent of businesses and hold significant GDP potential, Mr. Addo’s call to action struck a vital chord.
CBG’s partnership with Kasapreko, a leading indigenous beverage manufacturing company, served as an example of the impact targeted support can have. By serving as an arranger for the GH¢600million Note issuance, CBG facilitated access to affordable financing, enabling Kasapreko to expand operations and targets – creating an additional 1,200 jobs.
“This transaction is another addition to the issuances on the corporate bond market and I am supremely confident that it will be the spark that ignites growth in this market segment,” Mr. Addo stated.
The company’s fundraising effort was fully subscribed. It raised a total of GH¢151.05million, which is one of the highest amounts ever raised on the GFIM. This was achieved through two tranches of their bond programme, with the first part bringing in GH¢103.75million and the second part bringing in an additional GH¢47.3million at 26 percent.
However, he acknowledged the persistent challenge of traditional risk perceptions associated with SMEs, stating: “The challenge of SME financing is one that we must address head-on”. And the first step is to break from the past and jettison the notion that the risks are elevated.
The bank’s approach to overcoming this hurdle centres on expertise and collaboration, he added.
“Our business is the business of managing risk, not fleeing from risks. It is incumbent on us to reexamine our established paradigms, question our perception of risk, and develop financing structures that meet the evolving needs of our customers,” he noted.
Beyond financial solutions, Mr. Addo stressed the importance of building trust and understanding the unique needs of each SME.
“We are here not just to close transactions, but to build relationships, to listen, and to understand your needs so that we can better serve you,” he affirmed.
Kasapreko’s Managing Director, Richard Adjei, expressed delight with the rate and the terms of the arrangement, stating that it was evidence of how much good can be attained when indigenous entities collaborate.
“The collaboration is a good one and with CBG supporting us, it gives hope to the private sector. Many believe we need foreign capital but CBG has shown us that we can raise capital locally,” Mr. Adjei added.
