Supply for SME loans will pick up when inflation drops to comfortable levels and interest rates begin to decline – Addison
Sustaining macroeconomic stability requires the Bank of Ghana (BoG) to continue to ensure that the BoG keeps an eye on inflation, Governor Dr Ernest Addison has said.
When inflation declines to comfortable levels and interest rates begin to decline, demand and supply for small and medium-scale enterprises (SME) loans will pick up and be a key driving force supporting growth.
He said this during the launch of the SME Growth and Opportunity (GO) Programme SME Growth and Opportunity Summit on Tuesday, July 16.
Just last week, Dr Addison recounted, the country successfully went through completion of the Second Review of the IMF programme by the International Monetary Fund (IMF) Board.
The Board reaffirmed the generally strong programme performance and clear signs of emerging economic stabilization, he said.
However, hed added, noting substantial downside external and domestic risks, they underscored the importance of steadfast reform implementation to entrench macroeconomic stability and debt sustainability while fostering sustained growth and poverty reduction.
“Sustaining macroeconomic stability requires the Bank of Ghana to continue to ensure that
the BoG keeps an eye on inflation. When inflation declines to comfortable levels and interest rates begin to decline, demand and supply for SME loans will pick up and be a key driving force supporting growth.
“Let me also add that the Bank of Ghana recognizes the potential role of SMEs in Ghana and in this light has commissioned a study in collaboration with the Development Bank of Ghana and The University of Ghana Business School to better understand the constraints of the SMEs to formulate targeted policies to ensure growth. The objective of the study is among others, to ascertain the economy’s SME credit demand needs, the supply of liquidity by these SME and how FINTECHs could be leveraged to scale up lending by the SMEs. Last week, the University of Ghana presented preliminary findings of the research work based on over 500 SMEs surveyed, results of which has shed light on some of the burning issues of the industry.
“I am positive that the current positive developments in the economy together with our survey findings, when implemented effectively together with sustained improvements in the overall macroeconomic conditions should benefit the SME sector in the long run. In what follows, I will discuss some specific innovations that Bank of Ghana has implemented in recent years to support the SME sector. “
