Zenith Bank (Ghana) Limited, a leading comprehensive financial services provider, and African Guarantee Fund (AGF), have announced a strategic risk-sharing partnership to support Micro, Small and Medium Enterprises (MSMEs).
It is to provide increased access to funding for MSMEs in Ghana with a particular focus on green businesses and women-owned/led businesses. Recognizing that most MSMEs struggle to secure loans due to insufficient collateral or lack of credit history despite their invaluable contribution to the economy, this collaboration unlocks a suite of financial products and services specifically designed to address the unique needs of these businesses, fostering their growth and success.
AGF will provide partial guarantees on loans issued by Zenith Bank Ghana, thus reducing the Bank’s risk and making it easier for MSMEs to qualify for funding, opening doors they might have found previously closed. Mr Henry Onwuzurigbo, the Managing Director and Chief Executive Officer of Zenith Bank Ghana, speaking at the signing ceremony which came off at the Zenith Bank Ghana Head Office in Accra, said the Bank was acutely aware of the importance of small and medium-sized businesses as well as the challenges they face in accessing finance.
He added that the partnership was consistent with the Bank’s belief that banking is exhibited in its purest form when it has a direct impact on businesses and consequently, the real economy. “MSMEs are the lifeblood of the Ghanaian economy, and we are committed to providing them with the financial support they need to thrive,” Mr. Onwuzurigbo said.
“This partnership with AGF will enable us to reach more businesses, particularly those owned by women and those committed to sustainability and help them achieve their full potential,” he added African Guarantee Fund, in its first agreement with Zenith Bank Ghana, is pioneering a landmark partnership aimed at bolstering SME lending Mr. Bendjin Kpeglo, AGF West Africa Managing Director, said, “This partnership is a significant stride in our mission to drive sustainable economic development through our guarantee facilities to increase Zenith Bank Ghana’s financing of MSMEs in Ghana.” Despite the progress made in recent years in promoting financial inclusion for women, the gender financial gap in Ghana is estimated at $242 million. Women entrepreneurs face financial exclusion, often the biggest challenge in running and growing their businesses. These exclusionary barriers include a lack of collateral, lack of understanding of financing or lack of inexperience in business management, as well as social and cultural constraints like the inability to inherit land.
The partnership leverages the African Development Bank’s Affirmative Finance Action for Women in Africa (AFAWA) Guarantee for Growth programme, which aims to unlock up to $3 billion in financing for women-led small and medium enterprises in Africa through financial institutions. A substantial portion of the risk-sharing mechanism will offer women-owned and women-led businesses discounted loan pricing and increased guarantee cover along with technical assistance support to help reduce the gender finance gap in Ghana. This aligns with Zenith Bank Ghana’s commitment to financial inclusion and gender equality. “This new signature agreement illustrates the African Development Bank’s commitment, through the AFAWA initiative, to promote women’s economic empowerment and financial
Source: Gng.org