GCB Bank urges MSMEs to formalise businesses for easier access to finance

GCB Bank’s Head of Micro and Small Enterprises, Cedric McAddy, has urged micro, small and medium-sized enterprises (MSMEs) to formalise and register their businesses to improve their ability to engage financial institutions and access funding.

Speaking to the media after GCB Bank’s MSME Caravan Clinic in Accra, held under the theme “MSME Unlocked: Powering Ghanaian Businesses for Sustainable Growth,” Mr McAddy said poor record-keeping and inadequate documentation remain significant challenges for MSMEs seeking financing from formal financial institutions.

“MSMEs have a challenge with accessing financing, especially from financial institutions, based on poor record keeping and their inability to have documentation as required by financial institutions,” he said.

According to Mr McAddy, GCB Bank is seeking to address the challenge by helping businesses improve how they receive and record payments through its collection and digital banking solutions.

“But at GCB, what we’ve done is that we are actually reaching out to the customers and so we are giving them collection solutions and so we are helping them receive payments from their customers,” he said.

He said the bank has about 300 field operatives who go out to customers to collect their sales, alongside digital solutions that allow businesses to receive payments from their customers.

The transaction data generated through these activities, Mr McAddy explained, is then used by the bank to assess businesses for financing.

Unsecured financing

Mr McAddy said GCB was also using the approach to expand access to unsecured financing for eligible MSMEs.

“Today we are giving unsecured loan of up to a million cedis to our MSMEs without collateral, without the need for annual statements, without the need for them to leave large amounts in their accounts. All based on the turnover,” he said.

He said the initiative was helping bridge the gap between the information traditionally required by financial institutions and the realities of smaller businesses.

“And so we are bridging the gap between the information required and the challenges MSMEs are having through these initiatives. And by doing that we are able to provide credit across the country,” Mr McAddy said.

He added that GCB has several unsecured loan products, with the level of financing depending on what customers require for their businesses.

Digital tools for business

Beyond financing, Mr McAddy said GCB was also helping MSMEs improve the way they conduct and manage their businesses through digital solutions.

He cited the bank’s SoftPOS solution, which enables businesses to receive payments via mobile money and cards using their phones, as well as stock management tools.

Mr McAddy said MSMEs could also access and operate their accounts through GCB’s mobile application, allowing them to conduct banking transactions from their phones without necessarily having to visit a branch or use laptops and tablets.

“We allow our MSMEs to have access to their accounts and to operate via mobile app. On the phone, MSMEs are able to do all their transactions as required by banks without the need for them to have laptops or tablets and without the need for them to walk into the branches,” he said.

He added that the bank also provides physical collection services and point-of-sale solutions, while businesses can open accounts online and apply for loans without visiting a banking hall.

Supporting sustainable businesses

Mr McAddy said the various interventions formed part of GCB’s broader effort to help MSMEs build businesses that can withstand challenges and remain sustainable over the long term.

“These are some of the things that GCB is putting out there, to help bring our MSMEs to run their business in a sustainable way,” he said.

Mr McAddy also linked the bank’s MSME support to job creation, noting that helping businesses remain operational and grow could have a direct effect on employment.

He encouraged aspiring entrepreneurs, including unemployed graduates with viable business ideas, to approach the bank for support.

“If you have a business idea, come to GCB, let’s discuss, let’s help you with our ideas and our resources to help you grow,” he said.

Call for business formalisation

Mr McAddy, however, stressed that formalisation remains important if MSMEs are to strengthen their relationship with financial institutions.

He urged business owners to register their enterprises and put proper structures in place to improve their ability to access financial support.

“It is important MSMEs try to formalise, to try and register their businesses so that it is easy for them to deal with financial institutions, so we can support them,” he said. “At GCB we are helping businesses formalise.”

He said the bank was inviting businesses across the country to join its MSME ecosystem as part of efforts to support the development of stronger enterprises and contribute to a more resilient Ghanaian economy.