DBG focuses on catalytic sectors to drive sustainable economic growth
In Ghana, the challenges facing small and medium-sized enterprises (SMEs) in accessing the capital they need to grow and thrive are all too apparent. A lack of access to long-term financing, in particular, has been identified as a key bottleneck that is hindering the availability of competitively priced loans to SMEs. This, in turn, is limiting the kind of investment that is needed to drive sustainable growth and job creation in the country.
According to available data from the World Bank, as much as 67% of loans in Ghana’s banking sector are short-term in nature, with tenors of less than three years. By contrast, only 33% of loans typically have tenors of over three years. This imbalance is putting SMEs at a significant disadvantage, as they often require longer-term financing to fund capital expenditure, research and development, and other critical investments that can help drive growth and improve their competitive position.
Recognizing the urgent need to address this financing gap, the Development Bank of Ghana (DBG) has been established to help unlock the potential of SMEs in the country. Specifically, the bank has adopted a wholesale banking model, which involves providing funding to eligible financial institutions to on-lend to Ghanaian businesses in targeted industry sectors. By focusing on catalytic sectors such as agribusiness, manufacturing, ICT, and high-value services, DBG aims to foster sustainable economic growth and job creation in the country.
At a recent MoU signing and RoundTable meeting held at the University of Ghana Business School (UGBS), Deputy CEO of DBG, Michael Mensah Baah, spoke about the importance of deepening development finance knowledge, innovations, and impact in Ghana. This theme, he noted, is closely aligned with DBG’s mission and vision, which seeks to accelerate an inclusive and sustainable economic transformation by fostering the growth of a competitive private sector.
To achieve this ambitious goal, DBG recognizes the importance of deepening its understanding of development finance, exploring innovative solutions, and measuring its impact. DBG is committed to working collaboratively with stakeholders, including UGBS, to develop innovative financial instruments and approaches that can increase access to finance for SMEs and promote sustainable economic growth.
The challenges facing SMEs in Ghana are significant, but the potential for growth and transformation is immense. By adopting a wholesale banking model and focusing on catalytic sectors of the economy, DBG is playing a critical role in addressing the financing gap that has hindered the growth of SMEs in the country. Through partnerships and collaborations with stakeholders, including UGBS, it is committed to deepening its understanding of development finance and driving impact in Ghana. The future looks bright for Ghana’s SMEs, and DBG is well-positioned to help unlock their full potential.
