Bridging the Financial Literacy Gap for Businesses in Ghana’s MSME sector

Author: Mrs. Amma Adjeiwaa Antwi

Having identified factors responsible for the gaps in financial literacy in an earlier article, I propose these interventions to bridge the gap for the players within the MSME sector. The proposed program is a multi-throng approach which if properly implemented, will bring tangible results to Ghana’s MSME sector. 1) Tailored Financial Education This exercise directly addresses financial bankruptcy in the sector. It aims to curtail incidences of business failure due to mismanagement of finances and financial illiteracy. Several agencies identify with the huge need for financial education and deliver relevant education to target groups. However, the story remains unchanged and business failures as a result of financial illiteracy persist. Perhaps it is so because some vital tools are missing in the mode of delivery. Financial education must be tailored to the needs of target groups. Use language and communication tools that they are familiar with. Check your mode of delivery. Lecture style facilitation to targets in the informal sector may not be the most effective training method. BAWYP adopts adult learning tools in delivering financial education. Response from target groups is always massive. After considering the peculiarities of target groups and the most effective mode for outreach, financial education must cover the following areas Managing working capital, and basic treasury management in business Financial management tips for business Identifying credible financial institutions to bank with, or how to choose a bank that benefits you and your business Raise awareness on financial scams and business fraud Emphasize the importance of insurance and pensions The above points will be treated in separate articles for better understanding Support to Access Finance This exercise directly addresses financial bankruptcy in the sector. It aims to curtail incidences of business failure due to mismanagement of finances and financial illiteracy. Several agencies identify with the huge need for financial education and deliver relevant education to target groups. However, the story remains unchanged and business failures as a result of financial illiteracy persist. Perhaps it is so because some vital tools are missing in the mode of delivery. Dynamics of the financial system Options to financing, whether debt or equity How to successfully secure funds How to prudently use financial resources solely for its purposes. Capacity building programs that seek to bridge the financing gap in the MSME sector must aim to do the following. Train on record keeping and formalizing business Train on developing simple business plan to attract funding/investors Train on loan/grant application process Implement credit monitoring system for successful loan applicants to curtail indiscipline and enforce judicious use of credit facilities Again, I emphasize that such capacity building programs must be tailored to address the needs of your target audience. Capacity Building - Managing Business Managing a business goes beyond overseeing daily operations to keep the business afloat. A business manager must be a visionary, a strategic thinker, and must possess basics skills for managing people, developing the business, marketing products/service etc. This third exercise must aim to provide knowledge on the basic tenets of managing business, irrespective of size or nature. The following are some of the key modules of any capacity building program for the MSME sector Develop a mission and vision for their business – Why the business exists, and how you hope to be in the next 5, 10, 15 or 20 years Develop a simple 2-page business plan as a blueprint for operations Build capacity to manage businesses with regards to people, customers, fraud prevention, business continuity, succession planning, etc. Make sound business decisions through mentoring and coaching Identify and pursue growth opportunities for their ventures Understand business financing options and their implications Modes of Delivery As mentioned earlier, use modes of delivery that will make capacity building programs effective. Mind you the MSME sector comprises budding entrepreneurs from diverse backgrounds. A one-way approach will be unsuitable for all members of your target groups. I recommend innovative capacity building tools. Create programs that go behold the traditional training methods. Ensure your programs are interactive, participants gain understanding, are able to share ideas, and retain the principles they are taught. At BAWYP, we have a team of experts who understand the dynamism of business groups. Our capacity campaigns are in diverse ways. We have used these modes to transform several businesses in the MSME sector. We deliver financial education via the following means. Group Outreach Programs, Training Seminars & Workshops A potent means to reach out to a large number of beneficiaries at the same time. Assess the needs of the target beneficiaries and develop content that will address their needs. The face-to-face nature especially provides a platform on which target participants can probe further, obtain instant feedback and gain access to rich information necessary to ensure sound business management education. Mentoring and Coaching for Key Groups A very important activity that augments training and capacity building. The exercises target key groups such as women entrepreneurs, young entrepreneurs, and startup businesses with the aim to address peculiar challenges for target groups. This activity ensures capacity building goes beyond just a one-time event. Media Productions Involves a 2 to 3-minute guide on the different aspects of managing business for success. Videos communicate better than words or even photo images. Usually produced in local languages, the Videos-on-Demand serves as permanent source of information. Participants can easily rewatch videos to keep in tune with training points.