The Chief Executive Officer of the Development Bank Ghana, Mr Kwamina Duker, says the bank has a catalytic role to perform by supporting the people and businesses that form the core of the economy and providing access to funding that is currently not available.
Speaking at a media engagement ahead of the launch of the DBG on Tuesday, Mr Duker said the bank intended to do things differently by operating as a united front with partners, banks and the small-medium enterprises.
“We must be different in the way we help solve some of the problems facing SMEs. We must be different as we fiercely uphold world-class governance standards,” he said.
DBG has been designed to help relieve critical bottlenecks that have hindered the availability of long-term, competitively priced loans to small and medium-sized enterprises in industry sectors that have the potential to transform the economy namely, agribusiness, manufacturing, ICT, and high-value services.
Based on available data from the World Bank, it was evident that 67 per cent of loans in Ghana’s banking sector are short-term in nature (less than three years), while just 33 per cent of loans typically had tenors over three years. The Government of Ghana recognizing this gap and this deficit and as part of its broader efforts to transform the economy, established DBG, in accordance with the Development
Finance Act, 2020.
DBG currently has GH¢1.2 billion in capital and received funds above $700 million from its shareholders and partners to lend to Participating Financial Institutions and provide capacity building.
The funding is from the government, World Bank, European Investment Bank, African Development Bank and KfW.
Mr Duker DBG had been designed to address the gap in funding for SMEs through developing strong partnerships, with the Development Finance Institutions (DFIs), the Participating Financial Institutions (PFIs) especially commercial banks and other groups, to provide business development services to these SMEs to help them to secure these loans and to use the loans to grow their businesses.
He said DBG would do this using an innovative model, including, providing competitively priced loans to partner financial institutions who will then lend to the small and medium-sized
enterprises and through this model we aim to catalyse growth in the private sector.
“Our commitment to make an impact by doing it differently and doing it properly,” he said.
He said DBG with some financial institutions, including CalBank, CBG, GCB and Fidelity Bank and there were plans to expand the list to include more commercial banks as well as institutions and savings and loans companies. rural banks and microfinance.
The DBG is also working with some partners such as the Association of Ghana Industries and the Ghana Stock Exchange, and the Ghana Enterprise Agency (SME capacity building focusing on women entrepreneurs) – (SME capacity to help improve the services and products available to SMEs.
