The Development Bank of Ghana (DBG) has been officially launched and is said to be the country’s latest attempt to shore up small and medium-sized businesses, which power 70% of Ghana’s $82 billion economy.
On the DGB website, the bank states that its mission is to:
- Facilitate and strengthen the flow of long-term credit to Ghanaian companies to fuel long-term economic growth
- Empower banks and entrepreneurs through financial innovation and other advisory services to strengthen the ecosystem in which businesses operate
- Promoting excellence in the companies we support in relation to environmental, social and corporate governance
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DBG initially has $600 million in loans to commercial banks in Ghana – including these 4 banks that have already signed up as partners:
- Consolidated Bank of Ghana (CBG)
- GCB ban
- loyal bank
The above banks will provide loans ranging from US$25,000 to US$3 million for 3 to 15 years to small and medium-sized enterprises (SMEs) in Ghana.
Companies with 100 or fewer employees are fighting for loans in Ghana. A World Bank report estimates the gap between supply and demand at 13% of GDP in 2017.
DBG was designed to address critical bottlenecks that have hampered the availability of competitively priced long-term loans to small and medium-sized enterprises in industrial sectors that have the potential to transform the economy, namely agribusiness, manufacturing, ICT, and value-added services.
In an interview with Reuters, Kwamina Duker, CEO, DBG said:
“DBG recognizes the crucial role of SMEs in our country’s economy and is committed to promoting their growth. We cannot do this without standing as a united front alongside our partners.
Very little long-term financing is available at interest rates that would allow our SMEs (small and medium-sized enterprises) to grow. DBG aims to increase the share of loans to small businesses in Ghana from around 9% to 15% in two years.”
– CEO, Development Bank of Ghana (DBG)
DBG is owned by the Government of Ghana. The breakdown of the $600 million in contributions is as follows:
- $250 million – Government of Ghana
- $200 million – World Bank
- $177.7 million – EIB
- $46.5 million – KfW
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