By Adedapo Adesanya
The International Finance Corporation (IFC) has announced a partnership with lender, Access Bank, to increase access to finance for small businesses in Ghana.
Under the partnership with Access Bank, IFC will invest up to $10 million in local currency equivalent in an unfunded risk-sharing facility (RSF) to increase lending to small and medium-sized enterprises (SMEs) in Ghana.
According to a statement, 25 per cent of the funding is specifically dedicated to women entrepreneurs including those in the agriculture, health, education, and green sectors, supporting waste reduction, energy saving, and sustainable building practices.
The RSF will provide a 50 per cent guarantee on a portfolio of eligible loans to SMEs of up to $20 million in local currency Ghanaian Cedi equivalent, eliminating the risk of currency fluctuations.
Although financial inclusion has improved in sub-Saharan Africa in recent years, small and medium-sized businesses still identify access to finance as a key constraint. According to the Global Findex Database, the credit gap for women-owned SMEs in Ghana was estimated at $213 million in 2021.
The RSF is processed under IFC’s Small Loan Guarantee Program (SLGP), a programme supported by the European Fund for Sustainable Development (EFSD) as part of the EU’s Global Gateway strategy.
The programme aims to de-risk and scale up financing for SMEs in Ghana and other eligible countries to enhance financial inclusion, and job creation, and bridge the SME finance gap in emerging economies.
IFC will also provide advisory support to help Access Bank strengthen its capacity to lend to SMEs and help them enhance their financial and business management skills.
“At Access Bank, we believe that empowering micro, small, and medium enterprises is crucial to promoting economic growth and development,” said Mr Olumide Olatunji, Managing Director of Access Bank Ghana. “Our partnership with IFC is a major step towards enhancing financial access for these businesses while giving them the financial push to thrive and contribute meaningfully to the country’s economy.”
IFC’s support will help Access Bank Ghana increase its reach to key segments that remain traditionally underserved by financial institutions, to triple the bank’s WSME loan portfolio to $60 million by 2028 where SMEs represent the vast majority of businesses in Ghana and are an important source of job creation.
“IFC’s commitment to supporting SMEs with local currency funding reflects our dedication to driving economic growth and job creation in Ghana,” said Mr Kyle Kelhofer, IFC Senior Country Manager for Ghana.
“With both financial and advisory support, IFC is empowering Ghana’s smaller businesses and fostering a more inclusive and resilient economy,” he added.
In the last decade, IFC has provided close to $2 billion in financing and advisory services in the Ghanaian economy, investing in key sectors such as healthcare, energy, agribusiness, financial services, infrastructure, manufacturing, retail, education, and tourism.