According to a 2022 World Bank study, 60% of small and medium-sized enterprises (SMEs) in Ghana lack access to formal financial services. This is a major constraint for SMEs, which are the backbone of the Ghanaian economy and account for over 90% of all businesses and employ over 80% of the workforce. SMEs struggle to secure financing from institutions due to a lack of collateral, high interest rates, and inflexible repayment terms. This hinders their ability to invest in new equipment, expand their operations, and create jobs.
Gye Na Tua is changing that. Gye Na Tua is a unique financing program designed to empower small businesses in the informal sector. At Motito, we believe that everyone deserves the opportunity to succeed, regardless of their background or circumstances. We created Gye Na Tua in partnership with the Association of Small-Scale Industries (ASSI) to address the fact that traditional financial products often leave out informal businesses. This lack of access to financing can hinder growth in small-scale industries. Gye Na Tua provides small businesses with access to the tools and equipment they need to thrive. Basically, we offer small businesses in the informal sector the opportunity to purchase the tools and equipment they need to thrive, without having to worry about upfront costs or high interest rates.
This program is simple and easy to use. Members of an ASSI-affiliated association can identify the tool or equipment they need, and we help them get it. We work with the association to approve the member's request, and then we deliver the item to them within just three working days. Our partnership with these associations in the informal sector is fundamental. It not only adds a layer of trust but also helps us reach members who may not be tech-savvy. Together, we provide education on Gye Na Tua, gather feedback, and ensure a seamless onboarding process. Members can repay the cost of their purchase over four months, with a one-month interest-free period. And, because we're committed to helping small businesses succeed, we offer reduced interest rates compared to our regular customers.
The impact of Gye Na Tua speaks volumes. We’ve distributed approximately 150 sewing machines in the past quarter alone to key associations, including the Ghana Garment and Dressmakers Association (Western Region) and the Ghana Unity Professionals Tailors and Dressmakers Association (Bono Region). A quick look at the success story of Joana Eshun, a fashion designer in the Ashanti Region, who was able to purchase a new industrial sewing machine through Gye Na Tua. This new machine has allowed Joana to increase her production by 50%.
"With Motito you enjoy the freedom of paying in installments - This really takes a lot of financial pressure off my shoulders," Joana says. "It’s not easy to make money, I’ll advise that people use Motito to have the ability to pay in bits. I'm so grateful for Motito's support."
This project exposes some of the main issues the informal sector faces with accessing technology. Even though Mobile Money adoption is high there’s still a general lack of deep interoperability between Mobile Money APIs and financial products and we witnessed it ourselves as most people are not well educated in requesting mobile money statements and are simply used to the basics of the service. This was a huge opportunity for us to enhance our service and bridge the gap between technology and the informal sector.
The journey doesn't end here. Gye Na Tua aligns perfectly with Motito's broader mission of promoting financial inclusion and improving the affordability of underserved communities across Ghana and other parts of Africa. The goal is to continue expanding the program's reach, touching more lives, and transforming more businesses. The future holds exciting prospects. Motito is expanding to other associations to provide the same service across different asset classes. With each new partnership, the impact of Gye Na Tua will be amplified, empowering even more individuals and businesses to thrive in their respective industries.
Why Are We Passionate About Gye Na Tua?
We’re passionate about Gye Na Tua because we’ve seen firsthand the impact that access to financial services can have on small businesses. When small businesses have the tools and resources they need to succeed, they create jobs, boost the economy, and improve the lives of their communities. This is undoubtedly a step in the right direction for improving livelihoods and for advancing Ghana’s economy.