Italy Assists SMEs With Soft Loan

The Italy Ambassador to Ghana, Mr Fabrizio De Agostini says a soft loan ranging from 30.000 Euros to 450.000 Euros will be given to Small Medium Enterprises(SME’s) to enable them extend their businesses and elaborate reliable business plans in the country.

Fabrizio de Agostinio said the loan granted is at an interest rate lower than the normal commercial rate between 8% and 12%.

The Ambassador said this during the launching of the Ghana Private Sector Development Facility (GPSDF) held in Accra.

He said the basic idea of the project is to offer to the enterprises that are willing to extend their basic and easier access to credit, through loans granted at an interest rate much lower than the normal commercial rate.

He stated that, the Entrepreneurs will have the advantage of a grace period up to two years and a long period for the repayment of five to eight years.

He emphasised that although the currency of the loan is Euro, the repayment will be done in the Ghana cedis, adding that the risk of the exchange rate does not fall on the beneficiary but on the Bank of Ghana.

According to the Ambassador, the facility will promote the co-operation between the private sector and the public sector in order to develop local initiatives at the district level and create new cluster of development.

Fabrizio de Agostinio noted that, special attention will be given to the Northern sector where some pilot projects which have already commenced will be financed.

The Minister for trade and industry, Ms Hannah Tetteh, launching the project said facility provided by the Italian government is in quest by the government of Ghana to develop a vibrant and competitive SME sector in the country.

She said the development of the private sector is the key to the achievement of growth, expansion and diversification of the economy, through innovative entrepreneurs and the promotion of a deep entrepreneurial culture, especially SME’s.

The Minister said, the first phase of the facility which amounted to 10 million Euros was fully disbursed between 2003 and 2008 and that, 29 SME’s benefited from the first phase such as the agro-processing, construction, mining, auto services and health related services.

She added that, the fund will be disbursed through local financial institutions and an individual SME can access between 25000 Euros to 550,000 Euros which is approximately between GH˘45, 000 and GH˘990, 000.

Ms Hanna Tetteh appealed to the beneficiaries of the facility and those who have benefited from the existing facility to adhere to the schedule of repayment.

Source: ISD (Michelle Fafa Agbenorto)