The micro, small and medium-sized enterprises (MSMEs) has been assured of access to affordable but long-term loans with tenors up to 5,7 or even 15 years to finance their business operations.
Mr. Sampson Akligoh, the Director of the Financial Sector Division of the Ministry of Finance, made this assertion during a virtual seminar organised by the Rotary Club of Accra South on the theme, “The Development Bank Ghana (DBG); A Catalyst for Private Sector Growth, Facts and Figures”.
Furthermore, the Director disclosed that the loans will be disbursed at commercial but highly competitive interest rates, under an agreement between the government and the existing commercial banks.
Also, the Director of the Financial Sector Division of the Ministry of Finance, revealed that the Development Bank Ghana will not directly channel out credit to the private sector of the economy, but will leverage on the existing banks to carry out this mandate.
“The provision of wholesale loans to the private sector by the Development Bank Ghana (DBG) will be made through existing commercial banks in the country”.
Mr. Sampson Akligoh
Mr. Akligoh further disclosed that the commercial banks in the country will serve as the means to channel credit from the DBG to the private sector.
Meanwhile, Mr. Akligoh revealed that one of the prime reasons for establishing the DBG is to cause a major shift of job provision from the public sector to the private sector within the country’s workforce.
“Most jobs provided in the country are from the public sector and its related institutions, but one of the major roles of DBG will be to cause that paradigm shift from the public sector being the biggest provider of jobs to the private sector.
“And this is going to be done by providing cheap, wholesale loans to the private sector to expand their businesses and employ more people”.
Mr. Sampson Akligoh
The Development Bank Ghana
The DBG will be a wholesale development bank, established as an entity, licensed by the Bank of Ghana under the new Development Finance Act under preparation.
Also, the DBG will have sound corporate governance including an independent board and professional management, expected to operate without government or political interference.
The Development Bank of Ghana (DBG) is part of a broader financial development project which aims at increasing access to long-term affordable finance, and boost job creation for about 10,000 enterprises, including 2,000 women-led MSMEs in key sectors including agribusinesses and manufacturing among others.
Furthermore, the development finance project will also strengthen the oversight of development finance institutions and the adoption of Environmental and Social standards by financial institutions.
Also, thebank will offer credit below market average interest rates and credit guarantees.It will mainly serve medium and small-sized enterprises whichmostly find itdifficult to secure loans at rates that allow for economically prudent financing of their operational activities.
Additionally, the development bank will give credit to industries and agriculture as a wholesale bank and provide guarantee instruments to encourage universal banks to lend to these specific sectors.
DBG will deploy products and instruments such as credit guarantee funds, refinancing of Participating Financial Institutions (PFIs) loans, term loans, business development services, and factoring, among others.
DBG will finance multiple interventions to attract private sector financing for credit-constrained MSMEs and small companies based in Ghana.
Furthermore, DBG in its operations is expected in the medium-term to focus on transforming industry, agriculture, agro-processing, and housing and mortgage sub-sectors of the economy.
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