MTN Ghana has urged Small and Medium-sized Enterprises (SMEs) to adopt stronger financial discipline and smarter money management practices. This call came during a virtual financial literacy webinar, part of the company's 30th-anniversary celebrations.
The webinar, themed “Making Money Moves: Building a Financially Smart and Sustainable Business,” brought together key financial experts. They discussed critical areas such as financial discipline, cash flow management, digital payments, investment, and wealth creation. The advice aims to help Ghanaian SMEs navigate economic challenges and build resilient businesses.
This emphasis on financial literacy for SMEs aligns with Ghana's broader economic agenda to foster local business growth and job creation. SMEs are the backbone of the Ghanaian economy, contributing significantly to Gross Domestic Product (GDP) and employment. However, many face challenges with access to finance and proper financial management, often leading to high failure rates. Improving financial acumen among these businesses is crucial for national economic stability and expansion.
Yaw Saifah, Senior Manager for BankTech at MobileMoney Fintech Limited, advised entrepreneurs to separate personal and business funds. He stated that mixing these accounts obscures true financial visibility and discipline. Mr. Saifah explained that without clear separation, business owners struggle to determine actual revenue, profit, and available working capital. He also encouraged businesses to use digital tools for monitoring sales, payments, invoices, and cash flows. Digital platforms allow businesses with multiple branches to monitor operations remotely and maintain verifiable transaction records. He further suggested Enterprise Resource Planning (ERP) systems for managing customer records, inventory, and other business activities, noting that poor inventory management, not just limited capital, often causes problems.
Paul Mante, Managing Director of EDC Investments, warned entrepreneurs against confusing revenue with profit. He observed that some businesses collapse because owners spend heavily as sales increase without first confirming profitability. Mr. Mante stressed, “Don’t spend before you calculate your profit.” He also cautioned against rapid expansion without sufficient working capital, stating, “Sales do not mean profitability. You can be making sales and still collapse.” He added, “Revenue makes the noise, profit creates wealth, and cash keeps an SME alive.” Mr. Mante urged patience in wealth creation, reminding attendees that “Building wealth is not a sprint; it is a marathon.”
Desmond Bredu, Head of Client Coverage at Stanbic Investment Management Services, encouraged Ghanaians to start investing regardless of income size. He suggested starting with small amounts, even GHS 50, instead of waiting for substantial funds. Mr. Bredu cautioned against keeping money idle, explaining that inflation reduces its purchasing power over time. He emphasized the need for discipline after earning money, stating, “Making money requires taking risks, but managing money requires frugality and discipline.” He urged business owners to track expenses, control lifestyle inflation, and retain earnings for reinvestment. Retaining money is essential for scaling up and moving to the next business level.
The implications of these recommendations are significant for Ghana's SME sector. Adopting these practices could lead to more resilient businesses, increased profitability, and greater access to formal credit. Financial institutions and policymakers will closely watch the uptake of digital tools and improved financial management. Enhanced financial literacy among SMEs could also boost the national tax base and contribute to a more robust and diversified economy. This initiative by MTN Ghana underscores the private sector's role in strengthening Ghana's economic foundation.