Bank of Ghana allocates GHC2bn to finance Small and Medium-scale Enterprises

The Governor of the Bank of Ghana (BoG), Dr Ernest Addison says the central bank has set aside GHC2 billion to finance the activities of small and medium-scale enterprises (SMEs) in the country.

Governor of the Bank of Ghana, Dr Ernest Addison

Dr Addison said this at the Monetary Policy Committee (MPC) meeting in Accra on Monday, 25 November 2019.

He said: “To further provide increased activity in the small and medium enterprise (SME) sector, the Bank of Ghana is setting aside 2% of the banks’ primary reserve to support targeted lending to SMEs as part of the Enterprise Credit Scheme announced in the 2020 budget. These funds will be held at Bank of Ghana and will be available to banks that participate in the scheme.”

Dr Addison added that this will ensure that they support and strengthen the growth of credit to the private sector.

“The Bank of Ghana will explore the possibility of setting a minimum loan to deposits ratio to ensure that more deposits mobilised by banks are channeled to viable private sector projects. The Bank of Ghana will hold further consultations with the banking industry to determine the impact of such a regulatory measure, and if warranted, determine the level of such a ratio and appropriate monitoring and enforcement mechanisms to promote its effectiveness.”

“The Bank of Ghana is putting in measures to reinforce the existing credit infrastructure by, among other things, strengthening enforcement of the credit bureau system under proposed Regulations to be made by Parliament pursuant to the Credit Reporting Act of 2007 (Act 726), and further strengthening the collateral enforcement mechanism under a new Borrowers and Lenders Bill to improve the quality of loans made by banks as well as facilitate recovery of loans and collateral.”

“The Bank of Ghana will be working closely with banks to ensure that banks do not pass on their operational inefficiencies and overhead costs to their clients. To do this, steps will be taken to align compensation with overall bank performance by linking it to clear parameters including the quality of a bank’s assets. Bank of Ghana will scrutinise compensation policies for Chief Executive Officers and key management personnel as well as Board of Directors of universal banks. To ensure transparency, banks will be required to publish Value Added Statements disclosing details of the compensation packages of key management personnel and Boards of Directors separately from total employee compensation,” Dr Addison added.

The BoG maintained the October policy rate at 16% for the fifth time.

Our newsletter gives you access to a curated selection of the most important stories daily.

Welcome to the Pulse Community! We will now be sending you a daily newsletter on news, entertainment and more. Also join us across all of our other channels - we love to be connected!

Eyewitness? Submit your stories now via social or:

Email: news@pulselive.co.ke

Recommended articles

Africa’s richest man Aliko Dangote poised to overtake another Russian billionaire Vladimir Lisin on Bloomberg billionaires list

Africa’s richest man Aliko Dangote poised to overtake another Russian billionaire Vladimir Lisin on Bloomberg billionaires list

Mzee Kibor's will made public, revealing how vast wealth and millions will be distributed

Mzee Kibor's will made public, revealing how vast wealth and millions will be distributed

Ini Edo posts new photos amid reports of welcoming a baby through surrogacy

Ini Edo posts new photos amid reports of welcoming a baby through surrogacy

Mathias Pogba brands Paul Pogba 'a so-called Muslim steeped in witchcraft' amid fetish claims about Kylian Mbappe

Mathias Pogba brands Paul Pogba 'a so-called Muslim steeped in witchcraft' amid fetish claims about Kylian Mbappe

Referee behind chaos at AFCON was rushed to hospital after match

Referee behind chaos at AFCON was rushed to hospital after match

Ne-Yo speaks out after wife Crystal announced end of their 8-year marriage

Ne-Yo speaks out after wife Crystal announced end of their 8-year marriage

Eddie Butita speaks on his fallout with Miss Mandi, offers her a job

Eddie Butita speaks on his fallout with Miss Mandi, offers her a job

Sadio Mane the odd one out as Bayern Munich stars take team photo with glasses of beer

Sadio Mane the odd one out as Bayern Munich stars take team photo with glasses of beer

Africa's richest man, Aliko Dangote, adds extra $915 million to his vast wealth in Q1 2022

Africa's richest man, Aliko Dangote, adds extra $915 million to his vast wealth in Q1 2022