A 2024 Pre-Budget Survey by KPMG has urged the government to accelerate the establishment and operationalisation of a Domestic Credit Rating Agency to allow providers of finance to assess the creditworthiness of Micro, Small and Medium Scale Enterprises (MSMEs) to enhance access to credit.

It also wants the government to establish a revolving and sustainable access to affordable finance for MSMEs.

The survey also appealed to the government to consider expanding programmes that incentivise commercial banks to allocate a portion of their funds to MSMEs through risk-sharing mechanisms to reduce the risk typically associated with MSME lending

The report added that MSMEs are the mainstay of the Ghanaian economy. However, one of their enduring binding constraints is access to cheap sources of finance as indicated by the survey results.

“Government is a key actor in improving access to finance for MSMEs to sustain and scale their business. While the Government has implemented a range of interventions dedicated to MSME financing as well as capacity building in financial literacy and business management, the sheer scale of MSME sector means much still remains to be done”.

“We encourage the government to accelerate business regulatory reforms to further simplify and reduce the cost and time involved in obtaining business registration, licenses and permits to improve formalisation and make commercial financing more accessible to MSMEs”, the report added.

Overall, the findings highlight that the 2024 Budget should prioritize policies that promote inclusive green growth by strengthening local businesses and promoting exports through industrialization, mechanisation of agriculture to promote food security and infrastructure development.

KPMG concluded that it hopes the insights from the survey will help the government in their deliberations and provide valuable contributions in the lead-up to the 2024 Budget.