The Member of Parliament for Walewale, Dr. Tia Mahama Kabiru, has launched a GH¢1 million fund to provide affordable capital to small business owners in the constituency, with a particular focus on women.

The initiative, dubbed the GH¢1 million “Fako” Fund, is designed to provide interest-free loans and other financial support to women, particularly widows, petty traders and small-scale entrepreneurs, to establish or expand income-generating activities.

More than 100 women are expected to benefit from the first phase of the initiative, with an additional 500 beneficiaries to be included in subsequent rounds.

Speaking at the launch in Walewale, Dr. Kabiru said the fund was established to support people who struggle to access credit from formal financial institutions because of high interest rates and a lack of collateral.

He said the idea was inspired by his experiences growing up in a rural community, where women often had to engage in menial jobs and small-scale businesses to provide for their families and support their children’s education.

“Based on my lived experiences with my mother in the rural community, where women have to engage in menial jobs and small-scale businesses in order to cater for their children and keep them in school, I have been thinking about what I can do to improve the lives of the people,” he said.

Dr. Kabiru said he was particularly interested in supporting women because of their critical role in caring for their families and ensuring the education of their children.

“So, we came up with this initiative to provide some capital to support these parents,” he added.

Affordable capital

The MP said many small business owners were unable to access loans from formal financial institutions because of the high cost of borrowing and their inability to provide the required collateral.

"We realised that most of these people want to access capital from the formal sector, but the onerous interest rates on these loans, coupled with the fact that they do not have the collateral required to access loans from financial institutions, make it difficult for them,” he said.

He said the fund was intended to provide a more sustainable and accessible alternative.

“As a Member of Parliament, I believe I have a responsibility to introduce an investment scheme that provides sustainable, affordable and accessible capital to them. That is why we have initiated GH¢1 million in seed capital for this fund. The essence is to support small businesses in the constituency,” he said.

Flexible repayment arrangements

Dr. Kabiru said a committee would be established to oversee the registration, assessment, disbursement and monitoring of beneficiaries.

He explained that the committee would assess the feasibility of applicants’ businesses and determine their capital requirements before funds were disbursed.

He said the repayment arrangements would be flexible and tailored to the cash flow and profitability of beneficiaries’ businesses.

“We also want to make it flexible. Repayment of the principal would be structured to accommodate the turnover of their businesses. If you have a rigid repayment schedule, you are basically not helping them,” he said.

“We want to tailor the support in a manner that fits the profitability and cash flow of their businesses.”

The MP also disclosed that beneficiaries would be linked to the Ghana Enterprise Agency for training and other support to help them establish and sustain viable businesses.

He expressed hope that the initiative would improve the incomes and livelihoods of residents, particularly women, across the constituency.

Measures to minimise defaults

Dr. Kabiru said measures had been put in place to minimise loan defaults, although he acknowledged that some losses could occur.

“We are instituting a small working committee in charge of registration and monitoring to ensure that people are monitored and are able to use the funds for their intended purposes,” he said.

He expressed confidence that beneficiaries would repay the funds, arguing that high interest rates were often a major factor contributing to loan defaults.

“Usually, people renege or default because of the onerous interest payments. As I explained, once we do away with the requirement for interest payments, and this is more or less concessionary support, we believe repayment will be easier,” he said.

According to him, the intervention would have both a grant and a loan component, with the loan component being interest-free.

“With the mixture, flexibility and business-friendly nature of this particular intervention, we expect the default rate to be as minimal as possible,” he added.

Funding sources

The MP said the GH¢1 million fund would be financed through multiple sources, including his social investment allocation and part of the Common Fund.
He added that individuals who had expressed interest in supporting the initiative were also expected to contribute.

“The sources of funding are wide. I am entitled to some amount by way of a social investment fund, and I am putting that money into the fund. I am also putting some money from the Common Fund, and, of course, there are people who have expressed interest in helping,” he said.

Dr. Kabiru said the initial target was to raise GH¢500,000, but engagements with potential contributors had given him confidence that the fund could reach the GH¢1 million target.

“The initial plan was to raise GH¢500,000, but upon the engagements, I am quite sure that I will be able to meet the GH¢1 million target for the fund,” he said.
Walewale women ask:

“Where is our Women’s Bank?”

Also, speaking to JoyNews during the launch, some women in the Walewale Constituency called for President John Dramani Mahama to fulfil his campaign promise to establish a Women’s Development Bank.

The women, many of them widows, said delays in implementing the initiative had worsened their economic difficulties and limited their access to affordable capital.

President Mahama and the NDC campaigned on a pledge to establish a Women’s Development Bank, a special-purpose financial institution intended to support women-owned and women-led businesses with low-interest loans and other tailored financial services.

The women said access to affordable start-up capital would enable them to establish and expand businesses and become more financially independent.

Nearly two years after the NDC returned to power, however, the women said they were yet to see the promised bank established.

Nantogmah Poakurgu criticised the government, saying the economic difficulties faced by rural women had been compounded by the lack of markets and financial support.

"This is not a good government. If he were a government, he would have made a promise to women and refused to keep it, knowing very well that rural women like myself suffer more than men. There is no market for my farm produce. Everything about this government appears deceitful,” she said.

Another woman, Rahmatu Sumuni, said rural women had been neglected and expressed disappointment in the government.

“We are tired and have lost hope already. We are constantly praying for long life so that we can vote them out in 2028. It is an instant regret; they are a complete disaster,” she said.

Nantogmah Hawa described the delay in establishing the Women’s Development Bank as a “sham” and called on President Mahama and the NDC to be truthful to Ghanaians.

“It’s a lie, it’s a big lie. I haven’t benefited, and my living condition as a widow with many dependants is becoming worse than before. Where is our Women’s Bank, John Mahama?” she asked.

She also complained about the lack of employment opportunities for young people who had completed their education.

“Our children have completed school, but the government has failed to provide jobs for them. There is no hope,” she added.

The women said the absence of adequate financial support had made it difficult for many of them to meet their basic needs and sustain their livelihoods.

They therefore urged the government to expedite efforts to establish the promised Women’s Development Bank or introduce alternative funding mechanisms to support women at the grassroots.

Women commend MP

The women, however, commended Dr. Tia Mahama Kabiru for introducing the Fako Fund, describing it as a timely intervention that could help rebuild their livelihoods.

The MP said the initiative was designed to complement government efforts and provide immediate financial assistance to women and other small-scale entrepreneurs who often struggle to access conventional credit facilities.

The GH¢1 million Fako Fund is expected to be rolled out in phases, with more women targeted in subsequent rounds.