The move will also help industry players in the financial market clear their goods and complete procurement agreements with ease.

The Chief Executive Officer (CEO) of Lynch Capital, Mr Frederick Dodoo, signed for his company while the CEO of Corlido Group, Mr Cornelius Doevendas, initialled for his outfit.

In an address, Mr Dodoo said one of the challenges many local suppliers in Ghana faced had been the frustration of payment delays in the supply chain of services.

He said issues of finance continued to impede the growth of indigenous businesses and companies within the supply chain process in Ghana, despite government intervention in promoting industrialisation and job creation.

Mr Dodoo said, “Factoring and receivables finance are closely and positively correlated with general economic growth because factoring grows rapidly and, therefore, when it slows, our volumes fall.”

He said factoring turnover in 2017 for European Union (EU) countries exceeded EUR1.6 trillion with a year-on-year growth increase of 7.5 per cent. Globally, the EU accounts for more than half of factoring transactions.
 
Factoring growth

Mr Dodoo said a few months ago, the management of Lynch Capital, having witnessed at first-hand the frustrations of local suppliers during times of payment delays, resolved to provide a permanent solution.

He said the traditional age-long method of bank loans and to a very limited extent invoice discounting had not helped, and in very common cases created their own challenges to the supplier.

Business climate

The Minister for Business Development, Dr Ibrahim Awal Mohammed, said the partnership further endorsed Ghana’s viable business climate.

He said various government interventions, including the reduction in the cost of credit, had gone a long way to improve investor confidence.

“The government has tried to stabilise the economy. We’ve done a lot to ensure that macroeconomic indicators are improving,” he said.

Dr Awal said there was a big potential of growth for both companies as Africa was trying to ingrate the continent while the Government of Ghana for the past one and a half years had tried to stabilise the economy to enable businesses to strive.

Dr Awal urged the two companies to use their partnership to support women entrepreneurs in the country to enable them to realise their full potential.

The minister commended the two companies for the partnership which he said would help propel the country’s economic agenda.