DBG, Proxtera to make available US$100m digital loans to Ghanaian SMEs

Small and Medium-sized Enterprises (SMEs) operating in Ghana’s agriculture, manufacturing, Information, Communications and Technology (ICT), and high-value sectors are to benefit from some US$100 million loan through a digital platform.

This is being made possible through a partnership between the Development Bank Ghana (DBG) and Proxtera, a Singaporean fintech company that aims to simplify cross-border trade and uplift SMEs through digital platforms.

Through this venture, DBG would provide beneficiary SMEs loans for growth and expansion, enabled by digital means by Proxtera.

The partnership was formalised by the two entities on the margins of the ongoing 3iAfrica Summit in Accra on Tuesday, May 14.

Mr Duker stated that for SMEs to qualify for the loan, it should be a Ghanaian-owned and working in the country, and its financial plan, deemed bankable.

Engaging the media after the short event, Mr Kwamina Duker, Chief Executive Officer (CEO), DBG, said the Bank had development stemmed from their belief that a more digitised way of lending has become necessary in this era.

He explained that while the Bank, through wholesale and rural and community is able to check the credit portfolios and other requirements for SMEs to get loans from them, the online platform would make it faster and easier.

“This platform allows that process to be much quicker, and effective, and as a result of that, the risk premium of the interest rate being applied to SMEs, will over time come down,” he said.

“If today, it takes about three to six months to get a loan, with a huge amount of documentation, and we can cut that down to turnaround of literally a real time of 24-hours… then we can appreciate the benefits of digitalisation,” Mr Duker said.

He stated that because no one bank could bridge the huge financing gap of SMEs, the bank was serving as a catalyst to de-risk the environment for other banks to also support SMEs with affordable loans for their operations, and to create jobs for the Ghanaian youth.

Mr Duker said that the Bank had done so in the rubber sector, making other banks to gain the confidence to provide loans to companies in that sector, and initiated a similar step in the rice sector.

He indicated that in the rice sector, for example, the Bank could reduce the financing bank by some 14 per cent, but by de-risking, producing the right results, showing the yields, it would crowd in the other banks, saying, “that’s the role of the development bank.”

Mr Saurav Bhattacharyya, CEO, Proxtera, stated that they would through their technological platform build a credit engine for SMEs to be evaluated quickly for the disbursement of loans.

He stated that Ghana is the fourth country to benefit form their platform, which he expressed confident that would help solve the access of credit challenge of Ghanaian SMEs.