Speaking on the importance of developing a commercial paper market for investors and borrowers, Mr. Bentsi-Enchill noted that the alternative market is crucial for a functioning economy. He said “Reliable access to funding is a key determining factor for every functioning economy, and also for the functioning of the productive. When a corporate entity needs money, the first point of call is the bank but there are also money lending places like pension managers, mutual funds, pensions funds where large pools of capital sit. What a commercial paper market enables us to do, is to be able to channel some of these capital for productive use in the economy so that in addition to going to banks, the corporates will have alternative ways to raise money.

“Also, investors, through a commercial paper market, get an avenue to diversify their investments. Having a well-run commercial paper market will, therefore, provide an alternative for both investors and borrowers. That is why it is important that we have this commercial paper market set up and running,” he added.

Kobby Bentsi-Enchill further provided some suggestions that will facilitate the building of a strong and robust commercial paper market in Ghana. He said “The first thing we have to consider as we develop the market is to develop a strong foundation. That is why we are working with Ghana Stock Exchange and Bentsi-Enchill Letsa & Ankomah (BELA) to set up regulations and a framework that will ensure investor protection and also ensure that all the transactions are done in a transparent manner.  It is important that all the stakeholders pull together to ensure that this is done. We also need to make sure that it is cost efficient. Potential investors who want to tap into the commercial paper market should be able to do so at a cost that is effective so that they will be able to turn their money around and deliver the returns to their investors on time.”

Stanbic Bank Ghana in collaboration with Bentsi-Enchill Letsa & Ankomah (BELA) and the Ghana Stock Exchange (GSE) are working to develop a framework for the effective operation a commercial paper market in Ghana. Across the world, commercial paper markets have proven to provide businesses with a practical, convenient and cost-effective means of raising short-term funding. A commercial paper is ideal for fulfilling temporary cash flow gaps, meeting working capital needs, and addressing immediate financial obligations. When fully developed and operational, the commercial paper market will give Ghana’s capital debt market a critical boost as it will provide an alternative for investors and the secondary market.