Digital transactions can improve SMEs’ access to credit – stakeholders

Stakeholders in Ghana's financial sector have emphasized the critical role of digital transactions in bolstering micro, small, and medium-sized enterprises (MSMEs) in building trustworthy financial records and accessing credit and formal financial services. While mobile money has revolutionized Ghana's payment ecosystem over the past decade, expanding financial inclusion, many small businesses still predominantly rely on cash transactions. This limited visibility within the formal financial sector hinders their growth.

At the launch of Visa Accept, a digital payment solution designed for merchants to receive electronic payments via mobile devices, stakeholders noted the need for more initiatives to encourage digital transactions among MSMEs. Visa Ghana's Country Manager, Mr Fabrice Conan, acknowledged that mobile money had significantly contributed to financial inclusion but underscored the necessity of further expanding digital payment adoption.

Such progress would create the financial visibility required for businesses to access services like credit, insurance, and other financial products.

According to Mr Conan, digital transactions could help small businesses attract more customers, including international visitors favoring cashless payment options. Additionally, Mr Eugene Ocansey, the Executive Director of Access Bank Ghana's Retail and SME Banking, highlighted that credit access remained a significant challenge for small businesses due to the lack of business records and transaction histories.

Financial institutions struggle to assess the performance and creditworthiness of informal businesses because of insufficient data on their operations. Digital payment channels can provide an effective means of capturing transaction data, improving access to credit and enabling banks to offer tailored financial solutions to support business expansion.

Many small businesses remain excluded from opportunities within the formal financial system despite their contribution to Ghana's economic growth. Strengthening digital payment ecosystems can contribute to greater financial inclusion, improved credit access, and the growth of small businesses, which are vital to Ghana's economy.