Mr Robert Hertz Jackson, a Microfinance Expert from PH-Anova Solutions has urged Small Medium Enterprises (SMEs) to put in place good financial mechanisms to help make their businesses credible enough to attract Bank Loans.
Mr Jackson was speaking at the First Annual Financial Literacy and education conference organized by the Federation of Financial Educators and Organizations (FFEO) in Accra.
He however, cautioned that they should apply the Loans acquired diligently by investing in the businesses to bring about the growth of the business and to be able to repay on time.
“The Loans are meant for investment and not for personal spending and that you should make the appropriate calculations before the Loan”.
Robert Hertz Jackson
Financial Education Helps SMEs in Business Development
Meanwhile, Mr Joshua Mensah, the President of African Entrepreneurship School noted that the programme would contribute to the vision of the National Strategy on Financial Education. This will help citizens to have the knowledge, understanding, skills, and confidence to make prudent financial decisions for themselves, their families, and their communities.
Mr Mensah further stated that financial literacy and empowerment for businesses, especially the SME sector, was essential for the development of the business environment.
He thus, suggested that literacy education would enable these small businesses to know what expenditure to make during their business transactions. According to him, this will help prevent unnecessary spending that could affect the growth.
Mr Mensah noted that financial planning was one of the big problems some businesses face. Therefore, SMEs with this knowledge would experience their growth.
On his view on retirement, children’s future, Insurance planning, Mr Mensah stated that, “People should be well educated about all these things to aid them in their future financial decisions,”
Pension Contribution for Both the Informal and Formal Sectors
In addition, Mrs Rosina Akrofi, Education and Sensitization Expert at the Corporate Affairs Unit of the National Pensions Regulatory Authority, said pension contribution was necessary to prepare individuals in readiness for retirement.
She explained that the first-tier pension and the second-tier pension contributions were for the formal sector workers, while the third-tier contribution was for the informal sector.
Mrs Akrofi further explained that the third tier comprises Voluntary Provident Fund and Personal or Group Pension Scheme for contributors, who were self-employed in the informal sector.
She said the Scheme applied to individuals in the informal sector, who were not covered by any pension scheme under the mandatory part of the three-tier pension scheme.
As such, Mrs Akrofi urged the informal sector players especially SMEs to start contributing their pension as part of it would be used for investment.
“Persons in the informal sector who were not covered by the mandatory schemes shall have 35 percent of their declared income, exempt from tax for contribution purposes; while investment income from investment of Scheme Funds shall be tax-exempt.”
Mrs Rosina Akrofi
She said pension contribution in the informal sector is not constant as compared to the the formal sector. She indicated that a contributor could decide on any amount to contribute under the former.
Mrs Akrofi said a worker could join the pension contribution scheme if they were more than 15 years of age.
Meanwhile, the Annual Financial Literacy and Education Conference is an annual public awareness campaign on financial literacy concepts that help people make financial decisions. The Conference is on the theme: “Reshaping the Future of Finance through Digitization.”
The conference served as a platform for the stakeholders to learn and empower SMEs with resources and training so they could effectively support others in their communities to work toward greater financial security.
It also sought to build alliances, collaborate, share information, and challenge perspectives relating to their engagement in the area of Financial Education and how they could take advantage of the opportunities in digitization in the financial industry.
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