The Development Bank Ghana (DBG) has so far disbursed about GH¢245 million to its partner financial institutions for on-lending to small and medium enterprises (SMEs).
The
disbursement started when the bank was set up in July this year.
The
Chief Executive Officer of the bank, Kwamina Duker, who disclosed this, said
the DBG, in the next six to 12 months, would further disburse about GH¢1
billion of medium to long-term capital to support local industries.
He said this in an interview with the
media on the sidelines of a capacity-building workshop for SMEs.
“To
date we have lent about GH¢245 million and I think there were two reasons for
that — to flush out the pipes and make sure that our initial systems are
working.
“And
in terms of what is in our pipeline, we will probably have three or four times
of that — about GH¢1 billion, which we hope to disburse in the next six to 12
months,” Mr Duker said.
DBG
The
DBG, with a seed capital of $750 million from the World Bank, the African
Development Bank, the government of Germany, the European Investment Bank and
the government of Ghana, was established to become the key financier of SMEs in
the country.
The
overarching objective of setting up the DBG was to make long-term funding
available to the private sector and develop the ecosystem for market access,
technology and innovation.
The workshop
The
workshop was organised in partnership with the Association of Ghana Industries
(AGI) and the Ghana Stock Exchange (GSE) and it was aimed at boosting the
competitiveness of the private sector..
It was held on the theme: “Empowering
SMEs with key strategies for resilience and business sustainability”.
Participants
were taken through the five pillars of the Ghana Integrated Financial Ecosystem
(GIFE) digital platform, namely: the SME financial empowerment platform and
marketplace, financial trade corridor, digital financing, reputational building
and equity growth.
Signing of MoU
As
part of efforts to build the capacity of SMEs in the country, the DBG, together
with the GSE and the AGI, signed a tripartite memorandum of understanding (MoU)
to support SMEs in the country.
The tripartite agreement was signed
among the three institutions during the capacity-building workshop.
The
Deputy CEO of the DBG, Michael Mensah-Baah, said the agreement formed part of
the bank’s mandate to build the capacity of banks and entrepreneurs through
financial innovation and other advisory services.
He
said the bank’s primary objective was to ensure that SMEs were in a better
position to receive and use funds from participating financial institutions
(PFIs).
“A critical role of the DBG,
therefore, is to provide long-term funding for banks to engage in partnerships
with institutions such as the AGI and the GSE to ensure the empowerment of the
private sector for growth,” he said.
Supporting SMEs
The
Deputy CEO of the GSE, Abena Amoah, said the exchange was also committed to
supporting SMEs in the country.
She
used the opportunity to urge SMEs to use the Ghana Alternative Market (GAX) to
raise capital to finance their businesses.
That,
she said, would help them grow and expand.
Pension funds
The
President of the AGI, Dr Humphrey Ayim-Darke, for his part, said the AGI was
engaging the government to increase the threshold of pension funds allowed to
be invested into the private sector.
He
said the private sector needed more patience and long-term capital such as
pension funds to grow and expand.
Currently,
he said, pension funds channelled into the private sector by the various
trustees of Tier Two and Tier Three pension schemes were “a meagre five per
cent”.
Dr
Ayim-Darke expressed the hope that the AGI would be able to convince the
government to increase the percentage of pension funds it channelled into the
private sector from the current five per cent to an appreciable level.
“The
government has been very careful on how much of pension funds goes into
high-risk sectors; and in the private sector, as much as there is high risk,
there are also high returns.
“However,
most of the pension firms prefer safe investments, such as going into
government instruments. But we need a bit of pension funds to expand the
private sector and manufacturing,” he said.
Source: Graphic Online