The Ministry of Finance (MoF) has received financing from the World Bank towards the cost of the preparation of the Development Finance Project (the Project), which supports the establishment of the Development Bank, Ghana (DBG) and the design of its future products and services
The proposed project will be implemented at the national level and its overall development objective is to increase access to finance for Ghanaian enterprises, particularly small and medium enterprises (SMEs). The primary beneficiaries will be creditworthy businesses, particularly SMEs, that lack access to finance to explore growth opportunities. Women-owned/led SMEs (WSMEs) will be particularly targeted by the project.
The DBG will provide lines of credit and Partial Risk Guarantees to eligible Participating Financial Institutions (PFIs). The PFIs will finance eligible and creditworthy enterprises operating nationwide across sectors such as agriculture and manufacturing. In addition, the project will provide technical assistance to financial institutions that are interested in expanding their lending to businesses, particularly SMEs and WSMEs. The Project has four components as follows:
Component 1 - Line of Credit Facility and Related Technical Assistance: The project will provide a long-term line of credit to the DBG, which it will use to provide credit facilities to eligible PFIs. The PFIs in turn will use these funds to provide loans to eligible enterprises for investment and working capital needs. The Project will also finance technical assistance and capacity building of the MoF, DBG, and the PFIs. Technical assistance to the MOF will finance the costs of experts to support the establishment of the DBG, preparation of environmental and social instruments, and development of the regulatory framework for development finance.
Technical assistance to the DBG will be to build its institutional capacity to enable it to effectively perform its role as a market-maker (as wholesale lender, guarantee provider and fintech platform owner). This will include support to design products and services; develop key operational policies, procedures, and systems (including on risk management, governance, compliance, loan underwriting, environment and social risk management, management information and reporting, and monitoring, evaluation & learning); strategic planning, and staff training. Lastly, the project will also finance technical assistance needs of PFIs to enable them to effectively use the services provided by the DBG, including strengthening their policies, procedures and systems, and staff capacity building.