The Managing Director of Consolidated Bank Ghana Ltd. (CBG), Daniel Wilson Addo, has announced that CBG is expanding its Small and Medium-sized Enterprises (SME) capabilities by partnering with the new Development Bank Ghana (DBG) to deliver technical and financial support to the sector.

CBG defines SMEs as small businesses with annual financial turnover of up to GH¢15m and medium businesses with turnover up to GH¢75m.

Speaking to a section of the media on CBG’s agenda for SMEs this year, Mr. Addo indicated that CBG has over the years delivered extensive support to SMEs and is keen on expanding its capabilities in the sector to tap into opportunities that exist and ensure an improved contribution from the SME sector to the country’s economy. According to him: “We have approached this in a holistic manner, and it is just not to fund SMEs but to take the entire SME value chain and see how we can:

• enable businesses to operate more efficiently by unlocking cash that is trapped in receivables,
• facilitate collection for SMEs, and importantly
• build capacity in the SME space.

We have done that through the products we have rolled out and through the technology platforms we have established. This allows SMEs to collect money through their mobile wallet and make deposits via mobile tellers deployed in the markets to collect cash from SMEs”.

CBG has over the last couple of years increased its financial support to SMEs by disbursing over GH¢1.3billion and also expanded its reach to them through its 114 branches across the country. These have been complemented by technological platforms which offer convenience and security to the Bank’s SMEs. For CBG, SMEs are a key population in its agenda to promote the economic development of Ghana. The introduction of DBG therefore presents the Bank with an opportunity to offer that much-needed support, which CBG has welcomed.

Mr. Addo highlighted that: “DBG is a financial institution that was established to address very key challenges within the business community. That is, the access to long-term funding of SMEs that supports investments and growth. With a capital base of GHS1.2billion and counting, because there will be additional capital, we are confident that DBG is adequately capitalised to discharge the mandate that it has”.

He further added: “It is important to know that DBG as a wholesale lender will not be dealing directly with customers and SMEs or local corporates, but will be disbursing its funding through financial institutions that are designated as participating financial institutions. I am delighted that DBG has been set up and is operating, because there is going to be a lot of value created within the space as DBG commences its lending activities to SMEs through commercial banks like CBG”.

On the partnership with DBG, Mr. Addo indicated that CBG is delighted to work with DBG on the very laudable agenda of supporting SMEs. Additionally, DBG will provide partial credit guarantees, and these are innovative approaches to funding that will also broaden and deepen the whole financial ecosystem for CBG and SMEs.

Mr. Addo advised SMEs to take advantage of the opportunity provided by the introduction of DBG in order to grow and create more jobs. He mentioned that accessing the loans will be as simple as applying, provided the applicant is a CBG customer and the Bank can take a look at their financial flows. “CBG has an innovative way of looking at your financing, and therefore it’s not all the time that we will ask for collateral – but essentially going back to Finance 101, lending is about cash flow and so our products, services and technology platforms are geared toward having a view of that customer’s cash flow; and once we have a view of that and we are able to tie-in collections from those cash flows, we are ok,” he explained.

CBG has 114 branches in 13 out of the 16 regions in Ghana which offer SMEs access to the Bank’s products and services. This is in addition to the Bank’s SME Centre in Accra and digital channels. Another SME Centre will be established in the Ashanti Region in order to increase access to funding and technical support for the sector. Additionally, the Bank is positioning itself to play a major role in ensuring that SMEs take full advantage of the Africa Continental Free Trade Area’s (AfCFTA) opportunities.

Commenting on the CBG-DBG partnership, Mr. Addo said: “This partnership will help strengthen our balance of payment positioning because it will boost exports, particularly into the sub-region, and ultimately position Ghana as a manufacturing and services hub within the sub-region as well as the gateway to West Africa, as we have always wanted to be. DBG is very essential to this whole agenda because DBG brings to the table the critical long-term financing that is necessary for SMEs to grow their businesses and markets for their products and services. These, for me, are the key benefits from this DBG-CBG partnership”.

DBG will be launched on 14^th June. It is expected to begin making announcements in the very near future.