We are paralysed in such a way that our thinking capacity is hemmed in by old age practices and cultural norms that threaten to collapse our entire financial system.
Our way of doing things makes corruption a norm rather than a cancerous option to be avoided, replaced by sound financial management and good book keeping at the least.
What has now come to be known as the â€œUT Way - a loan in 48 hoursâ€ is fast challenging the traditional banks, as recent upstart in the financial sector, UT Bank takes over from the orthodox way of business as usual.
Last week, 8th October, Retired Captain Budu Koomson of UT Bank provided great insight into possible solutions for the SME conundrum of access to finance.
Successive Governments tout the private sector as the engine of growth for Ghana and in consequence the SME sector becomes the focus for all planning but unfortunately, more rhetoric than action.
Presenting his concepts for â€œcuringâ€ the SME problem, Budu Koomson described three pillars and several anchors to pin these pillars down for possible resolution to our SME conundrum.
Government, Banks as Suppliers and SMEâ€™s.
A crisp list of his views needs very little elaboration.
What Government must do Create macro economic stability Promote sound fiscal policies Present a sound National Strategic Plan Provide good regulation and Institutions Ensure a functional legal system Provide a good and effective tax system Manage public hostility toward Government In themselves these anchors are by no means novel to Ghanaian businesses and to our Governments.
The fact that we keep bringing them up as requirements to ensure financial stability and progress in governance means we do not have a mechanism to remove the bottlenecks in our structures.
For the umpteenth time of any government in our history, this paralysis does not seem to have a cure.
Where Banks are going wrong They have adopted a basically alien system of banking The banking environment is chaotic Banks are not making any effort to listen to the SMEs Banks employ Ivy League graduates who talk down to SMEs Banks have a latent mistrust of the SME or informal sector Listen to any SME tell you about their experiences with a bank or other financial institutions when they have tried to raise working capital will confirm this litany.
The present banking structure and processes do not favor serving the SME market.
What the SMEs are facing and doing out of turn They have a lack of trust in Government and the system They are last to understand when there is a change in Government policy There is still a criminalization of origins of finance going back to revolution days There is very little documentation of transactions and thus a lack of transparency SMEs lack planning and scientific and financial analysis SMEs have a clear lack of financial discipline Cultural practices and social and extended family pressures are priority ahead of business requirements There is a lack of use of research and development and a resistance to change from old ways SMEs lack a certain level of education required to move ahead in business The Human willingness factor These are classy bottlenecks identified by practioners.
To hear Budu Koomson speak gives you hope that there are possible solutions to these and other SME issues.
The simple fact that after 13 years UT Bank has bothered to fashion their own way of resolving the market is a mark of an educated, sophisticated and culturally savvy persons with a formula that might fix the SME finance access problem.