GH₵150,000 to GH₵50m available to SMEs under new fund

By Daniel NONOR, Accra

The GH₵8.2 billion fund for Small and Medium Enterprises Growth and Opportunity programme announced by the government of Ghana, would be heavy on funding capital expenditure and incubation projects up to a tone of GH₵50 million whiles operational expenditure projects would be assessed on case-by – case basis.

Dr. Abudu Abdul-Ganiyu, Technical Advisor to the Minister of Finance, provided an in-depth overview of the programme’s funding mechanisms in an interview with the New Finder recent.

He explained that the programme features three main funding windows- the Ghana Exim Bank, the Development Bank Ghana, and the Ghana Enterprises Agency.

Each of these windows offers distinct financial caps and tailored support to meet the diverse needs of SMEs under the programme.

Ghana Exim Bank offerings

Ghana Exim Bank to focus on CAPEX and Incubation projects

According to Dr. Abdul-Ganiyu, Ghana Exim Bank would place emphasis on  Capital expenditure (CAPEX) and funds projects up to GH₵20 million  while operational expenditure (OPEX) will be assessed individually without a fixed cap.

Under the Exim Bank’s financing window, One District, One Factory (1D1F) initiative, pipeline projects can access funding ranging from GH₵1 million to GH₵5 million.

Additionally, the bank’s incubator programme would also support start-ups demonstrating viability, by providing up to GH₵300,000 based on a solid business plan and proposal.

“So a startup that demonstrates viability with a proposal and a B plan . They can receive funding up to about GH₵300,000”.

Role of Development Bank Ghana

Development Bank Ghana to empower medium to large-Scale SMEs.

Furthermore, the Development Bank Ghana would focus on medium- to large-scale SMEs.

Upon passing the selection and training process, this category of SMEs can access funding potentially reaching up to GH₵50 million

“What the Development Bank Ghana would do is for SMEs to reach out to the Partner Financing Institutions PFIs with their business plan and proposals. Once they are considered viable, they go through a selection and training process they should be able to access funding as well and the focus would be on the Medium to Large Scale Businesses. That means that funding of up to GH₵50 million under that window is possible”

This window aims to foster significant growth and development among larger SMEs, enabling them to scale operations and enhance their market presence.

Ghana Enterprises Agency

Ghana Enterprises Agency to offer support to existing businesses

Dr. Abudu Abdul-Ganiyu, explained further that The Ghana Enterprises Agency would offer a funding window with a cap of GH₵1 million .

The explained that a notable feature of this financing window is the inclusion of a grant component, of about GH₵150,000 to support existing businesses, particularly those facing liquidity challenges.

This grant would serves as the minimum funding amount and is designed to spur growth and sustainability.

Stringent Selection and Monitoring for Effective Fund Utilization

Dr. Abdul-Ganiyu upon a careful reflection on past SME support programmes, there would be a more stringent selection process to ensure that SMEs utilize funds appropriately.

“Recovery has been a problem, with funds sometimes diverted to other areas, making recovery difficult,” he noted.

To address this, the programme incorporates robust monitoring, supervision, and management systems from the outset.

Technical support will be provided to SMEs to ensure they effectively implement their business plans and achieve desired outcomes.

The government of Ghana and its partners recently announced a GH₵8.2 billion to fund the development of Small and Medium Enterprises (SMEs) in the country.

Of the stated amount, the government of Ghana is providing GH₵700 million, while the International Finance Corporation (IFC) and the African Development Bank Group are providing funding of $400 million and $45 million, respectively.

The programme will be coordinated by the Ministry of Finance and the Ministry of Trade and Industry, with the Ghana Enterprises Agency (GEA), Ghana EXIM Bank, and the Development Bank Ghana (DBG) as the principal implementing agencies.

These agencies will ensure the targeted delivery of financial and technical support across the whole spectrum of SMEs, from early-stage innovative micro-enterprises to well-established Small and Medium-sized companies oriented towards export