DBG announces plans to lend up to $600m to small businesses in 2 years
The newly formed Development Bank of Ghana (DBG) has mapped out plans to disburse $600 million worth of credit facilities to small businesses over a 2-year period.
This was disclosed by DBG’s Chief Executive Officer, Kwamina Duker.
The CEO was quoted to have said, “There is very little long-term financing available, at rates that will allow our SMEs (small and medium enterprises) to grow. Is this a difficult time? Absolutely. Is this a time when a development bank is needed more than ever? Absolutely.”
He further disclosed that the funds would first be disbursed to selected commercial banks such as Consolidated Bank Ghana and Fidelity Bank of Ghana, who would then lend to small businesses.
Loans to be given out to SMEs by DBG would have maturity dates of 3 to 15 years.
Although Mr Duker declined to disclose the interest rate for the loans, he did claim that it would be lower than what currently obtains in the West African country.
The loans are expected to immensely benefit small businesses in Ghana where it’s been reported that many companies with less than 100 employees struggle to receive credit facilities to grow their businesses.
The Development Bank of Ghana is now hoping to increase the proportion of loans available for small businesses from 9% to 15% between now and 2024.
Do note that Ghanaian Government has put down $250 million worth of equity in the development bank.
Funds have also been received from the likes of The World Bank ($200 million), European Investment Bank (177.7 million), KfW Development Bank (€46.5 million) and the Africa Development Bank ($40 million).
