In a strategic move to stimulate economic growth and job creation in Ghana, the International Finance Corporation (IFC) has announced a partnership with Access Bank aimed at increasing access to finance for small and medium-sized enterprises (SMEs). A significant portion of this initiative will focus on providing financial support to women entrepreneurs, empowering them to grow their businesses and contribute to the country’s economic development.
Expanding Access to Finance for SMEs
As part of the partnership, IFC will invest up to $10 million, in Ghanaian Cedi equivalent, through an unfunded risk-sharing facility (RSF) to support SME lending. The facility will target businesses across various sectors, including agriculture, health, education, and environmentally sustainable industries. This initiative is geared towards promoting sustainable business practices such as energy saving, waste reduction, and green building solutions.
The RSF will act as a 50 percent guarantee on a portfolio of eligible loans of up to $20 million. This guarantee will cover currency risks, ensuring that local businesses are protected from the volatility of currency fluctuations. In a bid to drive gender equality in entrepreneurship, at least 25 percent of the facility will be allocated to women-owned SMEs (WSMEs).
Supporting Women-Owned Businesses
One of the critical aspects of the partnership is the support for women entrepreneurs in Ghana. By dedicating a quarter of the funding to women-led businesses, the initiative aims to bridge the finance gap that has traditionally limited the growth of WSMEs. Women entrepreneurs often face greater challenges in accessing finance, and this program is a step towards creating a more inclusive business environment.
Olumide Olatunji, Managing Director of Access Bank Ghana, emphasized the importance of empowering small businesses, particularly those owned by women, stating, “Empowering micro, small, and medium enterprises is crucial to promoting economic growth. Our partnership with IFC will provide these businesses with the financial boost they need to thrive and contribute meaningfully to the country’s economy.”
Enhancing SME Financial Inclusion
The RSF falls under IFC’s Small Loan Guarantee Program (SLGP), backed by the European Fund for Sustainable Development (EFSD) as part of the EU’s Global Gateway initiative. This program aims to de-risk and scale up financing for SMEs, not only in Ghana but also in other eligible countries. By enhancing financial inclusion, the program seeks to bridge the finance gap that exists for SMEs in emerging economies.
In addition to the financial investment, IFC will provide advisory services to Access Bank to help strengthen its capacity to lend to SMEs. This support will include training and resources to enhance the financial management and business skills of SMEs, ensuring that they are better equipped to grow and succeed.
Tripling WSME Loan Portfolio
With IFC’s backing, Access Bank Ghana aims to significantly expand its reach to underserved business segments, including WSMEs. The goal is to triple the bank’s WSME loan portfolio, targeting $60 million by 2028. This ambitious target underscores the commitment of both organizations to fostering financial inclusion and empowering women in business.
According to Kyle Kelhofer, IFC Senior Country Manager for Ghana, “IFC’s commitment to supporting SMEs with local currency funding reflects our dedication to driving economic growth and job creation in Ghana. By empowering smaller businesses with both financial and advisory support, we are fostering a more inclusive and resilient economy.”
Addressing the SME Credit Gap
Despite improvements in financial inclusion across sub-Saharan Africa, access to finance remains a major hurdle for many SMEs. According to the Global Findex Database, the credit gap for women-owned SMEs in Ghana was estimated at $213 million in 2021. This partnership between IFC and Access Bank is an essential step in closing that gap and offering new opportunities for growth.
A Decade of Support for Ghana’s Economy
Over the past decade, IFC has invested nearly $2 billion in financing and advisory services in Ghana. These investments have spanned critical sectors such as healthcare, energy, agribusiness, financial services, infrastructure, manufacturing, retail, education, and tourism. The partnership with Access Bank is the latest in IFC’s ongoing efforts to strengthen Ghana’s economy and promote inclusive growth.
