The 1968 banking act should be reviewed to enable commercial banks own equity in companies they finance thereby ensuring the growth of small scale industries.
This proposal was contained in a 14-point communique issued at te end of the bankers seminar organised by the Ministry of Industries to find solution to problems confronting small scale industries.
The act, as of now does not allow banks to own share or enter into venture capital. The act also restricts equipment leasing to the merchant banks. This with the restrictiveness Central Bank regulations, prevent banks from lending to small scale industries.
Other proposals contained the communique include: The regular coordination of efforts by the Ministry of Finance, Central Bank and other financial institutions to ensure consistent policy to make it easier for banks to finance small scale industries.
The communique stated that the Central Bank should play a more active role in providing input in policy formulation by government on small scale industries.
Government the communique said, should provide a credit guarantee scheme for small scale industries that is similar to the agricultural credit guarantee scheme.
