The Managing Director of Consolidated Bank Ghana Ltd. (CBG), Daniel Wilson Addo, has stated that his outfit is committed to deepening collaborations with Development Bank Ghana (DBG) to facilitate and strengthen long-term credit flow to drive economic growth among Ghanaian businesses.
Commenting on the importance of the partnership, Mr. Addo said, "DBG has a
big audacious goal to address very key challenges within the business
community. We all know the importance of SME support to Ghana's economy, and
CBG is delighted to be associated with DBG because of our commitment to see
SMEs thrive in Ghana."
"To add to our tall list of SME support activities, we partnered with DBG
to train 160 SMEs on the Foundational Financial Literacy Course as part of an
SME Financial Empowerment program. We at CBG look forward to deepening our
relationship with DBG to on-lend to Ghanaian businesses in targeted industries
such as agribusiness, manufacturing, ICT, and high-value services as the
catalytic sectors of the economy identified by DBG", he noted.
In his keynote address at the DBG-University of Ghana Business School (UGBS)
Development Finance Series MoU Signing and Roundtable Meeting held at the
University of Ghana, Mr. Addo also encouraged the Development Bank of Ghana
(DBG) to stay focused as an enabler for businesses in Ghana and as a long-term
capital provider in the market.
According to him, though, DBG is not required to maximise profit, the
institution must work to remain financially sustainable with less reliance on
capital injection from the government and ensure funds advanced to the
Participating Financial Institutions are repaid when due in order to help DBG
recycle capital.
“By the very nature of National Development Banks (NDBs), they are not required
to be profit maximisers. However, to effectively discharge their mandates and
limit the recourse to scarce public funds, they must be financially
sustainable. In a 2021 research report, Fitch estimated that one-third of
84 African NDBs posted losses in 2019 and the trend continues”.
“Whilst NDBs are not profit-driven, consistently posting losses raises the need
for continuous capital injection from a government that already has very little
fiscal space to operate. This then opens the institution to government
interference. To counteract this, DBG will have to manage its
funding costs, operate at high levels of efficiency, and as much as possible
employ funding structures that minimize credit losses”, he advised.
He added that it was also necessary for CBG to carefully identify the sectors
where it could make the most impact and focus its lending and advocacy efforts
appropriately.
Since CBG’s inception, the bank has granted over GHS 1.5 billion to the SME
sector, provided an SME Center dedicated for advisory services, introduced a
program dubbed the CBG Adesua Series, partnered with Ghana Enterprises Agency
(GEA) to disburse concessionary loans totaling GHS 154 billion to 34,000 SMEs;
German International Cooperation (GIZ) to train 500 artisans; and GIRSAL in
supporting the agricultural sector.
Source: Peacefmonline.com