After having been first conceived in 2017, the Development Bank Ghana (DBG) was finally launched this week to help catalyse growth in the country’s small and medium enterprise sector.
The DBG has an initial $700 million to loan to private financial institutions – including CalBank, CBG, GCB and Fidelity Bank – who in turn will on-lend to SMEs.
The bank is financed through a consortium of loans from international lenders including the World Bank ($250 million), the European Investment Bank ($170 million), the German state-owned development bank KfW ($46.5 million), the African Development Bank ($40 million), and the government of Ghana ($253 million).
Ghana wants the new bank to ease the access to credit and finance for its SMEs, which comprise about 80% of businesses in Ghana, by providing loans with tenors greater than three years. An estimated one to two million SMEs in Ghana are estimated to generate some 70% of GDP.
The Development Bank Ghana will also be used for capacity building, mentoring and business advisory services, and is partnering with the Association of Ghana Industries (AGI), as well as the Ghana Incentive-based Risk Sharing for Agricultural Lending.