Mike Nyinaku, Chief Executive Officer of BEIGE Capital, has encouraged stakeholders in the country to help build financial institutions that have the capacity to provide what he calls ‘patient capital’ to facilitate the growth of SMEs.
Speaking at the TEDx Accra forum on the theme ‘Finance or Crash’, Mr. Nyinaku explained that financing for SMEs is a major challenge in Ghana.
This is because we don’t have a lot of development finance institutions in our country.
Development finance institutions are typically the kind of institutions that provide growth capital, which is the type of capital that SMEs need to propel their business.
Universal banks are at the latter end of the finance chain because they primarily offer short-term funding, which is not normally suitable for business development at the early stages of an enterprise.
Addressing an audience of budding entrepreneurs about financing for their businesses, Mike Nyinaku gave reasons for which he believes Ghana does not have a lot of development finance institutions or private equity firms.
He remarked that most of the businesses in Ghana have not lived to fulfil their full potential and allow the original owners to reap substantially from their investments.
Most of these owners are still striving to achieve sustainability for their business, hence they do not have enough idle cash to channel into private equity.
Source: B&FT Online