Starting a Microfinance Business at age 19

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Best Ayiorwoth, winner of the 2013 Anzisha Prize

When Ugandan Best Ayiorwoth had to cut short her high school education because her family could not afford to pay her tuition, it broke her heart. However, this became the driving force that inspired her to start an award-winning microcredit business, at just 19 years old, that would go on to help hundreds of women and young girls in Uganda.
 
“Personally, I love being educated. I always wished to go to high standards in my education if it was possible. But unfortunately I did not have the chance to go to the level of education I wanted and I stopped at Secondary Four in Uganda,” Ayiorwoth said.
Having lost her father at the age of eight, Ayiorwoth’s mother strained to look after a family of seven in the Nebbi District in northern Uganda.

“My mother pushed me up to Primary Seven and she died while I was desperately waiting to join high school. I was 13 years old then. My two older sisters and brother struggled to push me to Secondary Four,” she explained.

“I never wanted to stop at that point in my education so it angered me… I would always remind myself that someday when I could, I would ensure that every girl child in my community received the best education they could.”

Start-up capital from her first salary
At the age of 17, Ayiorwoth moved to Kampala and joined vocational training schools that offered courses such as catering, graphics and web design. She later joined S7 Project, a skills empowerment centre, and got trained in catering and entrepreneurship. Through S7 she got a job working in a Mexican restaurant, where she received her first salary and the startup capital she would later use to follow her dream.

“I wanted to prevent what happened to me from happening to other girls because I knew it was a social injustice. So the first salary I got from the restaurant is what I used to open my organisation,” explained Ayiorwoth.

She realised that if she could empower mothers financially, they would support the education of their children, especially young girls. “I have seen that when families can’t maintain all their children at school and have to make a choice, they would often choose a boy over a girl,” she highlighted.

In early 2011 Ayiorwoth went back to the Nebbi District – where she had witnessed many girls, like herself, drop out of school – and started the Girls Power Micro-Lending Organisation (GIPOMO).

Using her savings of USh 100,000 (US$40), Ayiorwoth started slowly by giving monthly micro loans to enable women to grow their small businesses. With a 10% interest rate, she kept reinvesting her profit back into GIPOMO. It wasn’t long before her initiative caught the attention of her mentor at S7, who loaned her an additional USh 800,000 ($322) to boost her enterprise.

“My organisation has a unique twist in microfinance by providing tied loans to women who make a commitment to grow businesses while keeping their girl children in school,” added Ayiorwoth.

Today GIPOMO has helped 64 women start their own businesses, 111 women expand their existing businesses, and kept 168 girls in school by supporting their mothers.

At the beginning of 2013, Ayiorwoth won USh 1m ($400) at the FINA Africa Enterprise Business Challenge. In August she won first place and US$25,000 at the Anzisha Prize, a competition that recognises and celebrates African entrepreneurs under the age of 22 who are using entrepreneurship to solve problems in their communities.

Using a portion of the prize money, GIPOMO has already scaled up its operations four-fold, expanding to four different sub-counties in northern Uganda.

Innovative thinking to overcome challenges
Ayiorwoth started off providing credit to individual women but after two did not repay their loans, she changed her business strategy. She decided that in order for women to access finance, they needed to belong to a group of at least three. The strategic thinking behind this was that the women in a community knew each other and could group themselves with people they trusted to become guarantors for each other’s loans.

“We give them the freedom to choose who they want to be with in a group so that loans are secured. So if one woman has a problem of paying then the two others can always figure it out and stand in for that person,” explained Ayiorwoth. “This makes it easy for women without formal collateral to access financing in an easy way.”

Another challenge Ayiorwoth faced was that many of the women she worked with were illiterate, and the use of multiple languages made communication a challenge. To reduce this problem she collaborates with local government women representatives in communities to assist with communication.

Furthermore, Ayiorwoth explained that if she discovers that the mothers are not investing in their daughters’ schooling through income earned in their business, they will be disqualified from accessing finance from GIPOMO.

“That is the reason why we sometimes talk to those girls personally and we enquire exactly what is happening,” she added.

GIPOMO has also launched a Women in Agriculture fund, in collaboration with the Ugandan government, to provide microfinance to women interested in commercial agriculture and value addition.

Ambitious plans for the future
At the moment, GIPOMO only operates in one district in northern Uganda but Ayiorwoth, who has just turned 22, has big plans for her organisation.

“Right now I’m just trying to lay a good foundation so we can achieve real impact in one district. But in five years I see my organisation directly reaching 5,000 women in northern Uganda; and in 10 years, launching similar initiatives in different parts of the country. And we can even go further ahead and say that I see my model being replicated in various African countries because I know that the same problems are faced elsewhere,” she emphasised.

“For me, this is a new movement that redefines microfinance; to provide for specific needs in specific communities. Microfinance can never be relevant if it has one model. In one community, it should provide affordable finance for girl education and in another, it should provide affordable finance for land ownership – whatever the challenge a community faces.”
According to Ayiorwoth, GIPOMO is also launching an Education for Girls fund that will focus on providing no-interest loans to households interested in enrolling out-of-school girls into a skills development programme.

“I believe that once the girls possess practical skills, the chances that they will establish enterprises that apply these skills are high,” said Ayiorwoth. “In this way, my organisation would be developing a new generation of mothers that are skilled, entrepreneurial and financially empowered to contribute to family welfare and the education of their daughters.”

Advice to other young entrepreneurs
Ayiorwoth accredits a lot of her success to her mentor at S7, which she said continuously encouraged and challenged her to utilise her full potential.

She also wants to tell other young entrepreneurs that, no matter what their background, they have the potential to make a difference in their lives and the lives of others.

“They have to actually do something that they feel strongly passionate about, and in most cases they should seek inspiration from their own experience… If you had a terrible experience, you should despise the experience to the extent that you are continuously seeking a solution for it,” she concluded.

Source: How We Made It in Africa

7 Principles of Success and wealth Creation in Africa

Michael Agyekum Addo

Ghanaian entrepreneur and founder and CEO of the Kama Group Michael Agyekum Addo came from a poor family. He opened his first pharmacy in 1986 with no capital and today he owns 11 wholesale and retail outlets across Ghana, two pharmaceutical factories, a micro-finance firm, real estate business and a multi-purpose conference centre.
 
Addo is the council chairman of Ghana’s Pentecost University College, hosts a TV programme that educates viewers on entrepreneurship and oversees the Kama Education Project which trains teachers to make entrepreneurs out of students.

Addo has written a book, The Seven Principles of Success and Wealth Creation, in which he details his advice to entrepreneurs. He shares these ideas with How we made it in Africa.

1. Reliability
“We profess to be honest people but are we reliable? Are we reliable with our time?” asks Addo. “Time is money and we have no value for time. We call it ‘African time’ meanwhile we don’t have an African watch.”
Addo’s first principle to creating wealth and achieving success is reliability. He says people have got to be responsible for their actions. “We must show credibility. We must be a reliable group of people. After all, there is an adage that [says] ‘a good name is better than riches’. A good name means you fulfil all your promises.”

2. Hard work
Addo’s second principle to success is hard work, which means much more than being at work from 8am-5pm.
In his book he writes: “The extra mile you go each day plays a significant role in climbing the mountain of success. Hard work makes mastery. Working hard requires love for whatever you do.”
He says a hard worker is selfless, has discipline, maintains focus, does not complain and is a happy worker.

3. Savings culture
Addo recommends that people create a culture of saving, rather than living from paycheck to paycheck and using up all their monthly earnings.
“We should have something to set aside that will be for us, that will grow us, that will be our roots.” He likens people to trees: without strong roots they cannot reap the benefits of fruit.

4. Remember your background
To begin saving and to break the pattern of borrowing, Addo says people should remember where they come from – “a poor continent, a poor country, a poor family”. Rather than continuing the trend of borrowing and getting into debt, he advises readers to start saving to become richer people.

5. Investment
Another of Addo’s principles to creating wealth is investment, which leads on from saving.
In his books he advises people to use about 50% of their savings for investments in the first year, and then build on this with time and experience. In his book he writes: “When deciding to invest, try to do some research on the investment, invest no matter how small the amount, get some experience before making a high-risk investment, and seek advice when in doubt.”

6. God-fearing
A deeply religious person, Addo places power in faith, an idea he adds to his book: “If you fear God, you should display the 3Fs: be fair; be friendly and be firm to all people at all times.”

7. Patience
Lastly, Addo lists patience as a way of achieving success. “Be patient in whatever you are doing. Rome was not built in a day, even though a thousand miles start with one step.”

He expands on this notion in his book. “Don’t allow anybody to ‘rush’ you through life by forcing you to cut corners and take short cuts. Take your time and do things right. Most of the wealthy and successful people you see around are where they are today as a result of years of hard work, patiently working towards the goals they have set for themselves.”

Source: How We Made It in Africa

AfDB advocates increased Women Entrepreneurship in Africa

AFRICAN Development Bank (AfDB) has called on African countries to tackle the negative factors that are inhibiting the expected development of women entrepreneurship on the continent.

President of the bank, Donald Kaberuka, in his speech at the second African Women Economic summit in Lagos at the weekend, identified the factors as lack of collateral, outdated customary laws and practices, which prevent women’s right to properties and challenges of registering new businesses in the region.

According to him, some banks do not recognize women’s credit worthiness, ‘although they receive high credit rating from micro-finance institutions. “We must move on from these rudimentary constraints to issues such as innovative financing opportunities, mentorships and partnerships for women in business.

“Much more needs to be done to enhance the productivity of women in economic development. But the situation is not dismal. We are building upon previous achievements - reflected in our presence in this room today”, he said.

Kaberuka explained that women have always played a pivotal role in the socio-economic development of Africa. As farmers, entrepreneurs, traders and innovators, they are key economic actors in the continent, adding, “I believe, strongly believe investing in women differently is essential to revitalise our economies.

Earlier, Nigeria’s Minister of Finance, Ngozi Okonjo-Iweala, in a keynote address, emphasised that women’s economic empowerment was no longer an option because investing in women who constitute half of the continent’s population was the only way to sustain the growth recorded across the continent.

“Women are the third largest emerging markets in the globe. Women are the third largest sources of growth. One of the fastest ways to sustain current growth is to invest in women,” Okonjo-Iweala said.

She recommended the establishment of a specialised Bank to take up the financial interest of women, who do not have access to investment finance due to a host of reasons.

Also addressing the gathering, New Faces New Voices Executive Director, Nomsa Daniels, said in the next two years, the organisation would focus attention on the development of a data base on women participation in entrepreneurship, financing and the economy.

She said the group, which currently has chapters in 16 countries, would also organise capacity building programmes, financial education and enlightenment courses for women.

New Faces New Voices Advisor and a former AfDB Vice President and Chief Operating Officer, Nkosana Moyo, explained that finding ways of empowering women with quality health, education and finance was of utmost importance. “Women are actually a huge market segment and the most essential tool we need for the development of the continent. So, we need to develop financial products that can help to fully utilise their potentials.”

Source: The Guardian, Nigeria

African gov'ts should enhance Entrepreneurial Capacity of their Citizens

Former President of Ghana, J.A. Kufuor

Former President, John Agyekum Kufuor has commended the African Development Bank (AfDB) for diversifying its base to cater for the private sector in Africa and enhance their capacities.

He said by opening up to the private sector, the bank, which dealt almost exclusively with governments and the public sector in the past, was laying the foundation for building a strong and competitive entrepreneurial class worthy of competing evenly on the international stage.

Former President Kufuor was speaking on: "Challenges and Opportunities of Entrepreneurship and Capacity Development in Africa," at the Eminent Speaker's Forum of the AfDB at its headquarters in Tunis, Tunisia on Friday, a statement signed by Mr Frank Agyekum, Spokesperson to the former President said.

The function was chaired by Dr Donald Kaberuka, President of AfDB and attended by the bank's top hierarchy, financial experts, the banking community and diplomats.

Former President Kufuor said although Africa abounds in entrepreneurial talents, the continent lacks the technical know-how and informative knowledge of the market to take advantage of the benefits of globalization.

"The indigenous entrepreneur by himself is so seriously handicapped by history and lack of practice. But his failure, automatically, is also the failure of his nation which becomes the dumping ground for imports which could otherwise have been produced competitively locally and which would have enhanced job-creation and employment.

"Therefore, it behoves the public sectors of the economy to join forces to strengthen and deepen entrepreneurial capacity as the main agency for a nation venturing into the international market successfully," he said.

The former President said for Africa to get and secure its fair share of the market, it may be necessary to enter into partnerships that ensured know-how, capital and market for competitive advantage.

He said: "The critical mechanism to enlist such partnership is efficient and effective negotiating skills, which governments within their regulatory authorities should assist their private sectors with as they enter into partnerships with their foreign counterparts.

"The opportunities that would issue from the institutionalization and practice of the concept of Public-Private Partnerships as the cornerstone of Africa's development will be legendary.

"The continent abounds in practically all the raw materials requisite for sustained industrial, agrarian and economic transformation for its people's.

"It has the potential to become the single biggest market in the world in the foreseeable future. This is why it is being courted from the East and West. Now more than ever, it requires leadership of insight both in its political as well as its financial and intellectual institutions to guide and mainstream itself into globalization."

Former President Kufuor earlier on Thursday had separate meetings with Dr Ben Jafaar, President of the Constituent Assembly, which is drawing up a new constitution for Tunisia, and Mr Beji Caid Essebsi, who became Prime Minister in the wake of the Tunisian crisis that precipitated the Arab Spring and helped to bring the country back to normalcy.

Former President Kufuor will arrive in Shanghai, China Sunday for the second China-Africa Forum.

Source: Ghana News Agency

Ghanaian Banks are "Hot"

Tomatoes traders in Nima market. © EnterpriseAfrik

As Ghanaian bankers crack their brains on how to mobilise the vast financial wealth of the informal sector without exposing themselves to a sector regarded as extremely high risk, a new crop of young, finance-savvy entrepreneurs operating in the non-bank financial sector seem to be making a go of it.

With a combination of innovative savings products and credit arrangements, non-bank financial institutions in Ghana are sprinting ahead of the still sluggish banks in tapping the vast wealth of the informal sector.

First Capital Plus Saving and Loans (FCP) is arguably the fastest growing non-bank financial institution at the moment, having expanded its branch network to six within its first full year of operation with a view to increasing it to 18 by the end of this year.

In June last year, the entity introduced a new product onto the Ghanaian market that enables customers to deposit money into their accounts 24 hours a day via their mobile phones, the first in Ghana’s banking history.

Called SpeedBanking, it is akin to loading credit onto a mobile phone. What one needs to do is first to open an account with FCP. Subsequently, the account holder can buy SpeedBanking Vouchers with face values ranging from GH¢2 to GH¢1000 which you scratch to send a codified 12-digit number, just like loading mobile phone credit, to particular number for all networks and you receive immediate notification via SMS of the face value of the voucher being credited to your account.”

The Chief Executive Officer of FCP, Mr. William Ato Essien, was quoted by Ghana Business & Finance Magazine as saying that “the new service is targeted at the unbanked and under-banked to integrate them into the formal banking sector.”

This solution makes banking simple and more accessible, thereby roping in a lot more people into the formal banking system, he added.

Mr Ernest Osei, a retailer at Accra’s Kaneshie market who now uses SpeedBanking, told this paper, “I now do not worry too much about the risk of carrying my daily sales to the bank. After any substantial sales, I just buy a voucher and send the money into my account.”

With innovations that either seek to advance credit or mobilize excess liquidity in the informal sector, it is no surprise that there has been a recent explosion of finance in the microfinance sector.

The numbers speak for themselves. Statistics from the Survey of Apex Bodies show that by the first quarter of 2011, there were more than 300 formally registered and regulated credit unions nationwide. Registered microfinance companies operating under the lenders ordinance number at least 200, but there are estimates of over 1,000 such companies existing throughout the country. Individual susu collectors, categorized as informal financial suppliers, also have approximately 2,000 members registered with the Ghana Cooperative Susu Collectors Association. Again, more than 5,000 are estimated to exist nationwide.

Mr Dzigbordi Agbekpornu, Chief Operating Officer of Dalex Finance & Leasing, one of the country’s fast growing non-bank finance institutions, said the expansion of credit to the informal sector is a positive development.

“The proliferation of financial institutions that provide entrepreneurs easy access to credit, even if not at comfortable rates, can only be a healthy development given numerous complaints by entrepreneurs that the lack of access to credit is hindering growth of their businesses,” he told Economy Times in Accra.

The country’s commercial banks may be green with envy about the inroads non-bank financial institutions are making into rich virgin territory, but the Bank of Ghana, the industry regulator, is anxious to see banking make an even greater impact on the informal sector.

Ghana’s banking sector has grown rapidly in the last five years owing to fresh capital injection by existing banks to meet minimum regulatory capital requirements, as well as the entry of nine banks from the West African sub-region and Asia, bringing the country’s total number of banks 27.
A couple of years ago, the Bank of Ghana itself rolled out a smart card, the e-zwich, by which it hopes to mop up excess liquidity, as well as encourage the banking habit among informal sector operators.

But the product has not yet caught the fancy of both informal sector operators and the banking public and now faces tremendous competition from innovative products that enable mobile phone subscribers to carry out financial transaction via their handsets. 

Source: Economy Times, Ghana

Association of Small Scale Industries goes into “Susu"

Metal molding worshop in Kumasi. © EnterpriseAfrik

The Association for Small-scale Industries (ASSI) is developing the mechanism for the implementation of a “Susu Scheme” to augment the financial base and businesses of members.

The Scheme, a collaborative work between ASSI and Synovus Financial Corporation of the Netherlands (SNV), would provide credit facilities for small-scale industries with a flexible loan recovery rate.

In addition, the SNV would give technical assistance to the industries in the areas of Budgeting, Business Risk Management and Analysis, Marketing, Packaging and Organizational Development as well as Product Development.

Mr Kwame Buor, Ashanti Regional Chairman of the Association, made this known at the inauguration of the Asante Akim North Municipality branch of the Association at Konongo.

He expressed worry at the high interest on loans charged by the banking institutions, saying the situation had over the years led to the collapse of many small-scale industries.

Mr Buor said he was optimistic that, the Scheme would eventually alleviate the challenges small-scale industries go through as they seek credit facilities to expand and also sustain their businesses.

He appealed to members to be receptive to new ideas in coming out with innovative products to facilitate their marketability on the world market.

He appealed to the decentralized assemblies to support small-scale industries in organizing Business Fairs in their areas to market their products.

Mr Obeng Mireku, the Municipal Chairman of the Association, called on all small-scale entrepreneurs to join the Association to help streamline their activities.

This would also allow them to access credit facilities with less difficulty whilst benefitting from the exchange of ideas.**


Source: Ghana News Agency

Bank of Ghana receives 300 applications for Microfinance Operations

The Bank of Ghana has received over 300 applications from firms seeking to operate under the second tier of the regulated microfinance institutions.

Regulated activities under the Non-bank Financial Institutions Act 2008, increased from a single tier to four tiers, to include Susu companies, Susu collectors, money lenders and Financial NGOs.

Susu companies taking deposits and making profits are to operate under the second tier of regulated regime, which was expected to take effect from January 2012.

Such companies are to hold an initial minimum paid-up capital of not less than Gh¢100,000.00 for one unit office.

Franklin Belnye, Director, Banking Supervision Department, Bank of Ghana says issuance of licensing should begin by the end of this quarter, when processing of applications is concluded.

“The licensing process is going to be in two steps; the provisional process and the final license. The provisional process allows us to see that your position is feasible, the business can operate but we need to know more about the people behind the company; we have to do due diligence checks on them…after that only can we issue the final license”, he told Luv Biz Report at the maiden Annual General Meeting of the Ghana Association of Microfinance Companies (GAMC) – Northern Sector.

The AGM was on the theme: “The Era of Microfinance Regulations in Ghana, Prospect and Challenges.

The Association is recognized by the Bank of Ghana as an umbrella body for second tier microfinance operators, to ease dissemination of policies and programmes and instill sanity in the industry.

National Board Chairman, Collins Amponsah-Mensah, says the regulation is enriching the operations of the sector “because the regulation comes with conditions and we’re all putting our systems in place in a way that we’ll be able to qualify for the license from the regulator”.

The Association is intensifying its outreach programme to register more microfinance firms to obtain the requisite license to operate.

Source: myjoyonline.com

MicroEnsure Ghana to launch Credit Health Insurance for Microfinance clients

Traders in a market in Accra. © EnterpriseAfrik

The Ghanaian branch of MicroEnsure, a UK-based subsidiary of nonprofit Opportunity International that serves as a microinsurance intermediary, has announced plans to offer credit health insurance to microfinance clients in Ghana.

The product will enable MicroEnsure to cover weekly microcredit repayments in the event that the borrower is admitted to the hospital during the loan term.

Clients will need to present proof of admission and discharge from a recognized inpatient hospital in order to file a claim. The cost of the coverage will start at USD 0.25 per month and will cover loan payments for any health condition for any amount of time.

According to Eugene Adogla, director of operations in Ghana, MicroEnsure expects to pay hundreds of claims that range between USD 30 and USD 60 each month. Fiona Laryea, general manager of MicroEnsure in Ghana, stated that MicroEnsure Ghana also hopes to extend coverage to clients’ families.

Two unnamed microfinance institution (MFI) partners of MicroEnsure Ghana have signed up for the new product, and more organizations have reportedly expressed interest.

MicroEnsure serves approximately 3.5 million poor clients in Ghana, India, Bangladesh, Mozambique, Malawi, the Philippines, Tanzania and Kenya as of 2011.

Source: microcapital.org

A Ghanaian Chief advises Entrepreneurs to save with Credible Financial Institutions

The Paramount Chief of Lower Dixcove, Nana Kwasi Agyemang IX, on Wednesday admonished entrepreneurs and businesses to utilize their resources judiciously by saving with credible financial institutions.

He entreated petty traders and entrepreneurs to investigate the credibility of financial institutions before transacting business with them so that they do not run at a loss.

Nana Agyemang gave the advice at the opening of an ultra modern office complex of GHAMFO in Takoradi to coordinate and administer its activities.

He commended the GHAMFO Investment Savings and Loans Limited for distinguishing itself as a credible financial institution over the years and offered financial support to women in particular to boost their trade.

Ms Elizabeth Tawiah, Chief Executive Officer (CEO) of GHAMFO, said the company had 15 branches in Western and Central Regions.

Some of the branches are located in Sekondi, Daboase, Aiyinase, Tarkwa, Agona Nkwanta, Dixcove, Mankessim, Simpa, Dompim, Akwidaa, kojokrom, kokompe, Essiama, Takoradi and Nsuaem.

Ms. Tawiah said the company started as a non-governmental organization in 2007, which trained women in batik, tie and dye, soap making, sewing and catering.

After sometime, the NGO developed into a micro support scheme and offered financial support to women to improve their businesses.

It later methaphosized into a financial institution and offered services such as fixed deposit, loans, educator savings plan, old-age savings plan and kiddies savings plan to its customers, she said .

The CEO said the company aimed at ensuring financial independence to the needy and underprivileged in society.

Source: Ghana News Agency 

World Bank funds NYEP in Ghana with 65 million dollars

The World Bank has provided 65 million dollars to support Youth Enterprises under the National Youth Employment Programme.

According to the leadership of the NYEP, the World Bank’s support for youth enterprise programmes in Ghana is an indication that the programme is being well managed despite the challenges it faces.

In an interview with Citi News, the Deputy Coordinator of the NYEP, Ibrahim Mutala Mohammed said companies and organizations should submit proposals geared towards providing permanent jobs for the youth.

“The preparedness of the World Bank to give that amount of money to us is a clear indication of how well the program is managed, despite the challenges,” he opined.

According to him, the physically challenged will particularly be factored into the disbursement of the funds to keep them off the streets.

Young Ghanaian professionals, industry experts to converge in Accra

The Mövenpick Ambassador Hotel in Accra will on Wednesday, December 28, play host to business networking meeting for young Ghanaian professionals home and abroad and industry leaders.

Dubbed Re-Connect 2011, the networking event aims to redefine and strengthen the connection as well as deepen engagement between young Ghanaians at home and abroad.

Organizers tell Myjoyonline.com the event will give young professionals an opportunity to engage with one another alongside industry experts as a two-way exchange to foster the development of Ghanaians seeking opportunities for career and academic growth locally and internationally.

“It is also designed to encourage participants to exchange information and ideas, interact socially, promote their businesses, foster partnerships, and build on common interests,” explained Ms Stephanie Dei of S&M Consultancy, one of eight businesses (committee) putting the event together.

Other partners include The New Ghanaian, the[ Y] and AXIS and targeted industries range from oil and gas, telecommunications, finance, health, IT, legal and mass communications.

The event will also feature a designated room (Marketplace) to spotlighting emerging and successful entrepreneurs and give business owners the opportunity to showcase their products and services.

“We believe that development of Ghana and the promotion of the work of Ghanaians worldwide starts at home and Re-Connect 2011 promises to promote and encourage Ghanaian businesses and entrepreneurs to develop new relationships while providing the opportunity for Ghanaians to utilize their best resource; each other.” 

Source: Myjoyonline.com 

CEO of First Capital Plus wins Global Professional International Achievers award

Mr. William Ato Essien and by extension First Capital Plus has been awarded the Global Professional International Achiever Award (GPA), Banking and Finance category at the 10th GPA Awards held on Friday, 16th December, at the Banquet Hall, State House. Other Nominees in the category included the CEO’s of Databank and Zenith Bank.

The 2010 GPA awards dubbed: “10 years Celebrating Icons of Innovation", is aimed at inspiring existing and young professionals to develop a mind-set of becoming globally savvy while adopting Social responsibility initiatives.

The award was given to Mr. Essien for transforming First Capital Plus from a small micro-finance NGO into a financial powerhouse within just a period of two years through inspirational leadership and innovation.

It was also in recognition of his various societal impacting activities like the William Ato Essien Foundation (WAEF) which was established in June 2011 to:

• Assist under privileged children
• Provide financial support to the deprived
• Provide medical support to the needy in society
• Assist in educating the less privileged

In his acceptance speech Mr. Essien, attributed the award to “the doing of the Lord” and thanked the Management and staff of First Capital Plus for working assiduously to make First Capital Plus a key player in the financial services Industry.

In attendance were; Mr. Kofi Mensah (COO), Mr. Stephan Antoh (Executive Manager, Corporate Affairs, Legal & HR), Oheneba Osei Akoto (Executive Manager, Speedbanking & Business Dev’t) and other members of Staff. 

Source: Myjoyonline.com

Rural Banks in Ghana urged to support LESDEP

A mechanic at work in Suame Magazine, Kumasi, Ghana.

© EnterpriseAfrik

Rural Banks have been asked to explore ways of supporting the Local Enterprise and Skills Development Programme (LESDEP), which was recently launched by the government.

The banks were also tasked to ensure that the governmental  policy of Pre-Financing the Disbursement of the District Assemblies and Common Fund comes to fruition.

Prince Askia Mohammed, Savelugu/Nanton District Chief Executive, made these appeals in an address read for him at the Fourth Annual General Meeting of Borimanga Rural Bank at Savelugu at the weekend.

He said the government had created the enabling environment for the banks to operate efficiently by ensuring that the depreciation of the cedi had been arrested, while inflation had also been reduced to a single digit.

He, therefore, appealed to the banks to reciprocate the Governmental efforts by translating the favorable indicators into low base rates and other favorable business transactions with the public.

It is only through this that you can be seen to be properly complementing the efforts of Government at improving the quality of lives of our people, Prince Mohammed said.

The DCE further urged rural banks to provide tailor-made facilities for the rural people who are mostly engaged in agriculture as their source of livelihood.

Alhaji Amadu Montia, Board Chairman of the Bank, said due to the keen competition now in the banking sector, with the bigger commercial banks now expanding into the rural areas, rural banks could overcome this competition when they concentrate on micro-credit where they have a comparative advantage.

He stated that the bank recorded a net profit of GHC 27,576.00 for the financial year 2010 as against GHC 49,335 for the year 2009, a decrease of 44 percent.

He attributed the fall in profits to the slow pace of recovering MiDA loans and also over aged agriculture and working capital.

Alhaji Montia announced that the Bank has met the new capital requirements of GHC 150,000.00 for rural and community banks, saying that as at December 2010 the stated capital was GHc 152,643 as against GHc 135,543 for the same period in the year 2009, representing an increase of 11 percent over the 2009 figure.

Mr Eric Osei-Bonsu, Managing Director of the ARB APEX Bank Limited, in a speech read for him announced that the APEX Bank would soon establish a unit to manage share issues for the Rural and Community Banks (RCBs), including the payment of dividends and other related services, which, he said, was intended to boost investor’s confidence in the RCBs.

He said the bank was also in the process of creating a special unit to provide custodial services for RCBs tiers 11 and 111 pension contributors to make delays associated with the payment of pensioners a thing of the past.

Source: Ghana News Agency

Kenyan opens up Banking to the Poor

Bankers are often seen as only serving the interests of the rich, especially in the wake of the financial crisis, but Kenya's James Mwangi has managed to transform his company's fortunes while still offering services to the country's large poor population.

James Mwangi

Kenya's Equity Building Society was founded in 1984 with the goal of providing mortgage financing to low-income Kenyans.

But poor management and insufficient board supervision, among other factors, contributed to its deterioration and a decade on, the Central Bank of Kenya warned that Equity was on the verge of insolvency.

With the sword of bankruptcy hanging over their heads, in 1994 the building society's board of directors decided it was about time to include independent members in their rank and to recruit externally for managers.

That was when James Mwangi - who had worked with Ernst & Young and Trade Bank, and had been banking with the society for a couple of years - came on board as its finance director. 

"I jumped into the sinking boat so there were no two choices. There was only one way out: salvage, salvage, salvage," he told the BBC's series African Dream.

He said that, to his surprise, they managed to rescue the bank without having to recur to a reinvigorating injection of external capital.

"We used customer experience. I just trained the staff to give customers an experience they had never received before and what attracted customers was initially that customer service," he explained.

"And consequently we used customers' deposits to leverage. For three consecutive years, we had negative capital. We were leveraging on customers' deposits."

Microfinance

In the following years, Equity went from success to success and by 2000 its pre-tax profit was growing by nearly 80% a year. 

Mr Mwangi became the company's CEO in 2004 and two years later Equity - which had already been moving under his guidance from mortgages to savings and loans - was listed as a commercial bank on the Nairobi Stock Exchange.

Despite the changes of fortunes resulting from its new business strategy, Equity maintained the empowerment of Kenya's poor as a core value through its microfinance scheme.

"I think that what kept me going was that I was pursuing an idea. It was not an interest. It was that, in the fullness of time, we would make financial services accessible to the majority of Kenyans," Mr Mwangi told the BBC's Kevin Mwachiro.

"Every moment we looked there were signs that we were making progress. That constant progress is what gave us the strength to move on."

Over the years, Equity Bank has spread it wings across the region. It now has more than 7.5 million customers and has become one of the biggest financial companies in Kenya and East Africa.

Mr Mwangi considers that the bank's success has to a great extent been fuelled by passion and enthusiasm.

"If you look at Equity, it's an emotional business. People are driven by emotions and it's all about the enthusiasm of liberating our people, empowering our people to transform their lives and livelihoods," he said. 

'Symbiotic relationship'

In 2010 Mr Mwangi was named by the Financial Times as one of the 50 emerging market business leaders that have shaped the economic performance of their regions.

In September 2011 the Africa Investor magazine chose him as the African Banker of the Year for the second year in a row. 

He says that his motivation throughout has been to make a personal contribution to reducing poverty in Africa.

"You do good to society, they support the business, so it's a symbiotic relationship that seems to grow simultaneously," he said.

And what advice would he offer to people would are looking for capital from institutions like the one he directs?

"Prepare, prepare, prepare because you're competing for capital and capital is looking for prepared entrepreneurs," he said.

However, in his opinion, aspiring business people should also look beyond banks, at other factors of production.

He also thinks that they should try to get coaching and mentoring from those who have been successful.

"They have overcome all the odds, they borrowed from the banks so they have the know-how, and one need not reinvent the wheel if it has already been invented."

Source: BBC

MASLOC gives Kokompe fire victims GH¢1m

The Micro-Finance and Small Loans Centre (MASLOC) has presented a cheque for GH¢1 million to the fire victims of the Darkuman Kokompe Spare Parts Market in Accra.

A total of 210 spare parts dealers whose wares were destroyed by the fire a month ago are to benefit from the loan.

The loan, which is to be paid within 12 months with a two-month grace period, attracts a total of 24 per cent interest.

The release of the loan followed a directive by the Vice-President, Mr John Dramani Mahama, to MASLOC to assist the fire victims to get back to business. That was when he led a government delegation to make a donation of roofing sheets, pieces of wood, bags of cement and nails to the victims a month ago.

Fire gutted more than 4,000 shops at the market a month ago, destroying vehicles, spare parts and other items running into thousands of Ghana cedis. No life was lost.

Presenting the cheque, the Chief Executive Officer of MASLOC, Ms Bertha Ansah-Djan, said the spare parts dealers played a crucial role in terms of selling vehicle spare parts to many Ghanaians.

Therefore, she said, the extension of the loan was to help the fire victims to re-start and grow their businesses so they could continue to serve the people.

Ms Ansah-Djan asked the spare parts dealers to build their stores in concrete to prevent or mitigate the effect of fire outbreaks.

She stressed the need for them to insure their wares to enable them to get some assistance to re-start business in the event of any loss of property.

She urged the expected beneficiaries, who had been constituted into 10-member groups, to try to repay their loans on time.

The Accra Metropolitan Chief Executive, Mr Alfred Vanderpuije, said the presentation of the cheque was a testimony of the Better Ghana Agenda, which sought to improve the living standards of the people.

He charged the spare dealers to continue to maintain the standards that had enabled them to secure the loans, since that was the only way that they could grow their businesses.

Mr Vanderpuije stressed that many Ghanaians depended on them for spare parts and asked them to be “responsible in their operations”.

The Chairman of the Kokompe Spare Parts Dealers Association, Mr Kingsley Anane Yeboah, thanked the government for the prompt manner it facilitated the release of the loans.

He said the loans would assist the fire victims to get back to business, and gave an assurance that those who would benefit from the facility would repay the loans promptly.

Source: citifmonline

Ghana Commercial Bank to disburse Loans in 24 hours

The Ghana Commercial Bank (GCB) is hopeful of disbursing loans in 24 hours after it launched the 24 hr service together with other services.

The Bank announced earlier this year, its intentions to give loans within 24 hours which would become an industry first, beating existing competition of 48 hours offered by UT.

GCB unveiled the product along-side its internet and SMS banking services which are expected to get the bank to compete favorably within global banking standards.

According to the Managing Director of the bank Simon Dornoo, the new move is likely to get GCB to leap-frog competition in the Ghanaian banking industry.

He explained to Citi Business News that a loan approved within a day was possible because “we have invested in a commercial lending position which makes it feasible from end to end.

"From origination right down to risk management, we are covered in terms of what we delivering to our customers.

We see people in market borrowing at very high rates and of course, they can have access to banking at very competitive rates. ”

 

Bank of Ghana set up a committee to investigate base rates

Intercontinental Bank branch in Accra.

© EnterpriseAfrik

Accra - The Bank of Ghana (BoG) has established a tripartite committee to investigate the determination of base rates in the banking sector to promote a level playing field for setting lending rates and improve transparency and efficiency.

This is to tackle the challenge of why the banking sector still continues to charge high interests on loans despite BoG's implementation of complementary fiscal and monetary policies.

These have resulted in stable economic conditions and growth, holding inflation and policy rates at bay, and easing credit availability to the real sector to promote growth.

Mr Millison Narh, Deputy Governor of BoG, disclosed this in an address read on his behalf by Dr Samuel Ameyaw, Head of Monetary Policy and Economic Analysis Office, BoG, at the Third Power Breakfast Meeting of Canadian Chamber of Commerce, Ghana, (CCCG) in Accra on Tuesday.

The meeting on the theme: Ghana's Real Economic Challenge: Interest Rates", was to discuss the high interest rate regime in the country and its impact on businesses.

It was attended by stakeholders in industry and members of CCCG.

Mr Narh said 93We at the Central Bank have identified some major challenges to achieving low lending rate regime as the slow transmission mechanism, structural rigidities in the banking sector, and the need to intensify financial sector reforms to enhance efficient financial intermediation within the financial markets".

"The establishment of the collateral registry and the credit reference bureaus are expected to reduce information asymmetry in credit allocation in the banking sector and in the long-run help lower the risks associated with increasing non-performing loans in the banks' portfolio," he said.

Mr Narh pointed out that BoG was encouraging commercial banks to explore the idea of sharing infrastructure to reduce operational costs and improve efficiency in the delivery of financial products and services.

This is to eventually lead to a reduction in the banks' lending rates to ensure availability of more funds and at reduced costs to entrepreneurs for the growth and expansion of businesses in the country.

Mr Narh gave the assurance that BoG would intensify its surveillance activities to ensure efficient risk management and good corporate governance structures in the banking sector.

Mr Kofi Bentil, Policy Analyst and Vice President of IMANI Ghana, called on banks to stop the unnecessary competition in search of 93best talent" to reduce the cost of borrowing to businesses.

Mr Bentil said charging high interest rates by banks were to enable them to make more profits to pay ridiculously high salaries" and to poach staff members.

He called for improvement in statistics to ensure proper planning and forecasting.

Alhaji Abudulai Nantogmah, President of CCCG, said the chamber sees access to credit as playing a very important fundamental role in building a strong private sector in Ghana in the current competitive global enterprise".

He said CCCG was convinced that if more small businesses were able to access credit at an affordable cost, the gains could be immense.

Mrs Yvonne Nduom, Executive Chairman of Coconut Groove Hotels, who spoke on behalf of the private sector, called on government to ensure efficient and effective monitoring of the financial sector to prevent commercial banks from making unnecessary profits on borrowers.

Fidelity Bank to build the capacity of Microfinance Operators in Ghana

Microenterprises in Accra, Ghana

© EnterpriseAfrik

For some commercial banks, the Bank of Ghana’s new regulations for the microfinance sector have created business opportunities they have begun exploring.

Fidelity Bank for instance has entered into a partnership deal with the Ghana Association of Micro Finance Companies.

The deal would among other things see the bank build the capacity of the micro finance operators in their lending to Small and Medium Scale Enterprises (SMEs) through financial training and also provide the association with an office complex.

Head of Microfinance and SME Banking at Fidelity Bank, Richard Kwasi Appietu told Joy Business the training would help microfinance companies improve on their efficiency.

Board Chairman of the Ghana Association of Micro Finance Companies Collins Amponsah Mensah said the move is a timely one for SMEs towards transforming the microfinance industry.

He said people in the low income bracket had been denied financial services for far too long and the bank was determined to change that.

IFEX launches electronic products for “Susu” collection

Informal Finance Exchange (IFEX), a private organisation, on Tuesday launched a deposit collection and automated banking machines to assist government agencies, security services and “Susu” collectors to effectively collect revenue and data.

The machines use “latest and appropriate” technology to enhance financial management, security and criminal investigations, online identity verification and authentication for banking, non-banking financial institutions as well as operators of micro-finance schemes.

Speaking at the media launch in Accra, Mr Kwaku Akwetey, Chief Executive Officer of IFEX, expressed dis-satisfaction that the country lacked credible data collection system that provided absolute and reliable data for research, planning, business development, crime detection and security of the citizenry.

He said IFEX products had been designed to overcome challenges that operators of “Susu”, micro-finance enterprises and government agencies had to grapple with.

Mr Akwetey said: “IFEX is generally a multi-platform product that provides both software and the accompanying operative equipment. It provides total operational environments for the financial, commercial and the security services sectors of the economy.”

He said IFEX products would be useful in areas such as elimination of ghost-names from pay-rolls, detection and prevention of corruption, provision of accurate time-specific demographic and financial data and detection of scams and fraudulent deals.

The rest are provision of criminal investigations and efficient revenue mobilisation and efficient accounting systems. 

Source: GNA

Micro-credit Scheme for Young Entrepreneurs in Southern Ghana

Microentrepreneurs in Ghana.

© EnterpriseAfrik

Traders in a local market

An Entrepreneurial Development Fund with an initial amount of 25,000 Ghana Cedis has been established to provide micro-credit for Young Entrepreneurs in Ketu-South District, Ghana.

The revolving fund known as Ketu-South Youth Entrepreneurial Fund was initiated by Mr Fifi Kwetey, a Deputy Minister of Finance.

Mr Kwetey, who announced the initiative at a day’s workshop, dubbed: “Destiny Changing Seminar,” on the theme: “Transforming the Youth of Ketu and Raising Future Giants for Ghana”, said it targeted tertiary students, young graduates and youth leaders.

Topics discussed at the seminar included: ‘’building hope for the future,’’ job hunting to job creation’’ and ‘’procedures in enterprise formation.’’

The event is to engineer a new generation of people to create jobs for themselves, break the cycle of the mass hunt for non-existent jobs, sometimes by job seekers without skills.

Mr Kwetey said the Fund to be manned by a Board of Trustees would grant credit to only “serious-minded people”.

He asked the youth to brace up for challenges in life, saying no amount of projects could bring development to people whose mindsets were not tuned towards change.

Mr Charles Sam of Golden Future Promotions, an inspirational speaker, observed that many family enterprises collapsed on the death of their founders because of weak management structures.

Mr Emmanuel Dei Tumi of Foundation for Future Leaders told the participants that it was illusive to look to the government to solve all problems instead they should be innovative.

Mr Emmanuel Sarkodie, Chief Executive Officer of the CDH Financial Holdings, who talked on Enterprise Formation and Procedures, commended Mr Kwetey for the initiative.

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