$50m support fund for SMEs launched
About 150 Small and Medium-scale Enterprises (SMEs) in the country are to benefit from a US$50 million funding scheme aimed at boosting their growth and expansion.
The scheme is an initiative of Growth Investment Partners (GIP) Ghana, the newly launched investment arm of British International Investment (BII), the United Kingdom’s (UK) development finance institution.
Beneficiary SMEs in various sectors including energy, agriculture, forestry and manufacturing, will receive capital ranging between US$500,000 and US$5 million through flexible financing options that meet their needs of local businesses and are not available in the market.
Additionally, GIP with the support of the Ghana Investment Support Programme, will provide business support services and capacity building in areas of financial management, corporate governance and environmental and social practice to enable productive, sustainable and inclusive growth of SMEs.
Speaking at the launch of the SMEs support programme in Accra over the weekend, the Managing Director and Head of Africa, BII, Chris Chijiutomi, said SMEs occupy a critical role in the Ghanaian economy, accounting for over 90 per cent of business enterprises, 60 per cent of the country’s GDP and 80 per cent of all employment.
Despite its importance to the economy, SMEs in Ghana were faced with a financing gap estimated at US$4.8 billion, one of the largest in Africa.
“SMEs face many challenges with accessing growth capital through traditional funding sources including high interest rates, short-term loans, high collateral requirements and currency mismatches.
Compounded by a challenging macroeconomic environment, influenced by the global pandemic and geopolitical conflicts, SMEs in Ghana need access to long-term growth capital and business support designed to boost their growth, create jobs and deepen their contributions to the Ghanaian economy,” he stated.
BII, Mr Chijiutomi said created GIP as a unique and lasting solution that was not limited by typical fund investment horizons, which would enable the company to become a true long-term partner for Ghanaian businesses to fuel their growth.
Also, he explained that it was designed for investments from local institutional investors, contributing to the expansion of the capital market in Ghana and scaling GIP’s impact.
He added that GIP would support up to 150 Ghanaian SMEs within the next 15 years long-term flexible capital, primarily in local currency.
The Coverage Director for Ghana, BII, Kwabena Asante-Poku said the GIP funding support would add up to the existing US$129 million investments across 29 pioneering companies which employ more than 15,800 people in the country.
The Chief Executive and Investment Officer, GIP, Mr Jacob Kholi said SMEs with a turnover and total assets up to US$15 million as well as employees between 10 to 300 would be supported.
Also, he noted that beneficiary businesses should be incorporated and operate mainly in Ghana to meet the requirement for financing support
BY CLAUDE NYARKO ADAMS
