Importance of SME Development in Africa

Although they are afraid to talk openly, officials of some SME-focused banks are restive about the GH¢400million ($90.1 M) stated capital increment for banks, saying it could hurt SMEs badly. The central bank, a month ago, increased the stated capital of universal banks in the country from GH¢120million to GH¢400million – with a deadline of December 2018, which failure to meet will see licences revoked.

While many foreign-owned banks have welcomed the move and believe it is a step in the right direction, a number of local banks have been fretting that it could leave the field to multinational banks which have the financial muscle of their global operations behind them.

SMEs have been and continue to be critical in the local economy’s growth. According to the latest edition of the Integrated Business Establishment Survey by the Ghana Statistical Service, SMEs – which constitute 90percent of companies in Ghana – employ 71.4 percent of the workforce and contribute about 70 percent to GDP.