GHANA – Zenith Bank Ghana, a financial services provider, and the African Guarantee Fund (AGF) have announced a strategic risk-sharing partnership to provide increased access to funding for Micro, Small and Medium Enterprises (MSMEs) in Ghana, with a particular focus on green businesses and women-owned or led businesses.
Recognizing that most MSMEs struggle to secure loans due to insufficient collateral or a 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 previously closed.
Managing Director and Chief Executive Officer of Zenith Bank Ghana, Henry Onwuzurigbo, speaking at the signing ceremony that came off at the Zenith Bank Ghana Head Office in Accra, said the bank was 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,” Onwuzurigbo stated.
“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.”
African Guarantee Fund, in its first agreement with Zenith Bank Ghana, is pioneering a landmark partnership aimed at bolstering SME lending activities in the country. This collaboration marks a significant stride in fostering economic growth and empowerment within Ghana’s vibrant SME landscape.
Despite the progress made in recent years in promoting financial inclusion for women, the gender financial gap in Ghana is estimated at US$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, a lack of understanding of financing, or a lack of experience 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)’s Guarantee for Growth program, which aims to unlock up to US$3 billion in financing for women-led small and medium enterprises in Africa through financial institutions.
“This new signature agreement illustrates the African Development Bank’s commitment, through the AFAWA initiative, to promote women’s economic empowerment and financial inclusion while addressing the gender financial gap in Ghana,” said Eyerusalem Fasika, Country Manager of the African Development Bank’s Ghana Office.
The partnership also recognises the growing importance of sustainability. Businesses operating in green sectors such as renewable energy, eco-tourism, and sustainable agriculture will benefit from increased financing backed by AGF’s Green Guarantee Facility, demonstrating both institution’s commitment to environmental sustainability.
Beyond financial support, Zenith Bank Ghana and AGF are committed to empowering MSMEs with the knowledge and skills they need to develop capacity to expand their businesses.
They will collaborate to offer training workshops on financial literacy, business management, and sustainable practices. These workshops will equip MSMEs with the tools needed to navigate the market effectively, make informed decisions, and operate their businesses efficiently.
A continued partnership
This partnership builds upon Zenith Bank Ghana’s long standing dedication to supporting MSMEs in Ghana. In October 2022, the Bank introduced dedicated MSME accounts and partnered with organizations like Development Bank of Ghana (DBG) and the World Trade Centre Accra in collaboration with Alibaba to expand market access.
Furthermore, the Bank has collaborated with the German Sparkassenstiftung for International Cooperation (GIZ) to provide access to finance training and partnered with VISA to roll out the Zenith SME Business card to serve the business needs of SMEs and improve their business efficiency and productivity.
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