Development Bank Ghana (DBG) has secured $70 million from the World Bank and KfW for the establishment of the Partial Credit Guarantee (PCG) subsidiary of the Bank.
The Chief Executive Officer (CEO) of DBG, Mr Kwamina Duker, who disclosed this during the DBG and Ghana Association of Banks programme on Ghana's Medium-Term Outlook in Accra last Thursday, said the move was to help players in the banking and financial industry to adequately assess and manage risk.
He said the World Bank had offered $50 million and the KfW provided $20 million for the establishment of the PCG.
"We are excited to announce that the Partial Credit Guarantee subsidiary is scheduled to commence operations in the third quarter of the year. This timely launch will provide our partner financial institutions with an additional layer of support, allowing them to better manage risks associated with loan defaults while continuing to serve the Small and Medium Enterprises sector effectively," Mr Duker said.
The programme, which was on the theme "Ghana's Medium-Term Outlook, Navigating through Economic Uncertainties and an IMF Programme", was attended by banks and financial institutions which sought to build closer relationship between DBG and banks and financial institutions in the country.
Mr Duker, who spoke on the topic "The role of DBG, working together to resuscitate the country's economy", said one of the challenges being faced by the banking and financial industry was macroeconomic uncertainty.
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He said the prevailing macroeconomic conditions in Ghana, such as high inflation, currency depreciation, and fiscal constraints, had created an uncertain business environment, and thus compelled banks to take a more cautious approach to lending, and this has affected the ability of Small and Medium Enterprises (SMEs) to access credit and plan for growth.
"We possess the capacity to provide additional loans to back sustainable projects as they are presented to us, demonstrating our unwavering dedication to growing with our partners. The bank will focus on sectors with high growth potential and significant social and environmental impact, such as agribusiness, manufacturing, and low-carbon and climate-resilient investments," Mr Duker said.
The CEO of GAB, Mr John Awuah in his remarks said the birth of DBG was timely and its establishment would ensure significant increase in loanable funds available to Participating Financial Institutions (PFIs) of DBG.
He said the DBG and the PFIs had a unique opportunity to stimulate the financial architecture and deepen sustainable financing within the larger and productive sectors of the economy, adding that the collaboration of DBG with GAB would ensure banks provided the requisite long term funding at affordable prices to the business community.
