COVID-19: SME’s Share Interesting Stories on what they used Gov't Stimulus Package for
Posted on August 18, 2020
In May 2020, Ghana’s President, Akufo Addo made a decision to support small and medium scale enterprises (SMEs) impacted by the novel Coronavirus (COVID-19) pandemic with GH¢ 1 Billion.
Few weeks after the President launched the Coronavirus Alleviation Program Business Support Scheme, (CAPBuSS), the National Board for Small Scale Industries, (NBSSI) the institution supervising the disbursement was inundated with over 700,000 applications.
Almost everyone who applied was bent on receiving some funding to reduce the Coronavirus shocks that may have sunk their business. But not everyone met the criteria which made it a keen competition.
The NBSSI has since the last two months disbursed GH¢ 80 million to over 80,000 beneficiaries.
Abibata Abdulai lives in Ashaley Botwe, a small suburb of Accra.
She runs a bead making business called Beyond Creation. For over six years in business, Abibatu had never experienced a day when patronage was not a dinky bird.
Before the pandemic, Abibata was able to make about GH¢ 500 profit monthly; however lately, despite having a training programme which admits students for beads accessory training, Abibata says she struggles to make even a cedi.
“when the COVID set in, it was so poor, there were no events. We also train students but because of the social distancing and the lock down we couldn’t take in admissions, it was nil (be)cause you don’t have to open your shop, we all know during the lock down you can’t operate your shop,” she said.
Abibata was faced with reality, and like many owners of SMEs, she was less likely to be able to obtain bank loans. So she started relying on internal funds, or cash from friends and family, to keep her business running.
“Some were monetary, and some were words of encouragement, some would advertise my stuff on their status; friends and family have been so supportive from day one,” she said
But Abibata needed more than encouragement to be able to buy raw materials to make more beads and restock her shop.
The stimulus package, therefore, came handy.
Concerns were rife about the stressful nature of the application process but as a member of the national board for small scale industries, meeting the requirements was not a problem for Abibata.
News about the funding opportunity was put on one of their platforms and she took advantage of it.
She, however, bemoans the tedious processes she had to go through in filing and sending the application three times before she eventually went through and the inability of some of her colleagues to understand the language used on the forms.
“I noticed that many people when they are applying, were finding it a bit difficult when it gets to the monetary aspect, there was a question on the cash flow and I think their understanding was a bit low on that” she further explained, “you know it’s all written in English so some of the words you need to go to your dictionary to understand,”
Abibata was right. Majority of owners of MSMEs in Ghana (80%) fall within the informal sector and will require some support to fill out the online application form.
The NBSSI says it has collaborated with the metropolitan, municipal and district assemblies (MMDAs) to set up Help Desks to support applicants with data entry.
Abibata was however unhappy that she got only half of the amount she applied.
“I applied for GH¢ 2000 and it was slashed into two, I don’t know why. It’s better than none but I wish that at least if the person says 2000 or 3000, and fill all the forms correctly, they should be given that exact amount so that the person can use it to buy whatever he or she wanted to buy to improve in their various jobs,”
After all, the grants are not freebies.
Abibata is thankful that at least, her business is gradually picking up and wished there was another opportunity to reapply and get more funding.
Prince Otu-Darko is another beneficiary. Contrary to Abibata's story of being negatively affected by the pandemic, Prince had a boom in demand. Prince makes mango juice and had to source for more funding to expand his business when he had to increase the quantity he produces as a result of people wanting to drink more fruit juice to boost their immune system against the disease.
He had plans of getting a bigger freezer and a blender to be able to make more juice but was disappointed when his application of GH¢ 7000 was reduced extremely. Prince got only GH¢ 648.
Monies that only got him bottles for production of his juice.
"What I did with the money was to buy more bottles for production so at least it caused a change but not too much."
Prince Otu-Darko just like Abibata would appreciate a much higher amount to enable them to meet their goals
The Executive Director of the NBSSI, Mrs. Kosi Yankey Ayeh said they would learn from the experience.
“The first time you do something, I think that you learn from it, and this is the first time on the government level we’ve been able to use technology to push a process, and I think that it has been an amazing process and I think that next time we will be more efficient on it”
SMEs account for the majority of businesses worldwide and are important contributors to job creation and global economic development
The World Bank estimates that 600 million jobs will be needed by 2030 to absorb the growing global workforce, which makes SME development a high priority for many governments around the world. However, access to finance is a key constraint to SME growth which the World Bank identifies as the second most cited obstacle facing SMEs to grow their businesses in emerging markets such as Ghana.
The stories from the Abibata and Prince raise questions on how beneficiaries are able to use monies received to create the change given the significant reductions in the requested amounts.
Prince Otu-Darko believes if personal interviews were conducted by the NBSSI to understand the needs of applicants, the program would have made more impact.
“If I had spoken to somebody directly, the person could have understood me more and could have given me something more,” he said
“… it was something that was applied online, where you couldn’t get to speak with the person one on one for the person to appreciate what you are doing. So I just felt that okay, you would just have to manage what you have been given” he added.
By Daniel Nii Lartey