Measures in place to deliver on lending to commercial banks – DBG Deputy CEO

President Scaledwsed President Nana Addo Dankwa Akufo-Addo with officials of the newly established DBG

Thu, 23 Jun 2022 Source: www.ghanaweb.com

Development Bank Ghana officially launched

DGB to provide lending to commercial banks to support key sectors of the economy

DBG funds will not be used to purchase government securities

Deputy Chief Executive Officer of the Development Bank Ghana, Micheal Mensah-Baah, has assured that the non-deposit-taking wholesale bank will not repeat similar mistakes as some existing banks.

According to him, the Bank has placed stringent measures that will ensure it delivers on its sole mandate of lending to commercial banks to support SMEs and other specific sectors of the economy.

Speaking to journalists following the launch of the DBG last week, Micheal Mensah-Baah said the bank will desist from using funds to purchase government securities as done by some commercial banks in the country.

“We have specifically put in place certain measures that will ensure that funds that get to the Commercial Banks we are working through eventually get through to the SMEs. First of all, we will select Commercial Banks that are already lending to SMEs."

“Number two, we’re going to make sure that the Commercial Banks do understand the credit risk of the SMEs, and finally, we have an agreement with the Commercial Banks that specifically ensures the funds we give them to go to specific sectors of the economy, i.e agriculture, manufacturing, ICT and high-value services sectors. These are all enshrined in the master lending agreement that we have with the Commercial Banks,” he added.

He continued, “Within that agreement, there’s a specific timeframe that the funds stay with the Commercial Banks. If the time (one month) elapses without the funds being given out, then the funds return to the DBG,” he added.

Micheal Mensah-Baah further assured that the DBG will provide funds to existing commercial banks and other qualifying financial institutions to provide long-term lending.

The establishment of the DBG according to government is to ease access to credit and finance for SMEs, which comprise about 80 percent of businesses in Ghana.

The facility will provide loans with tenors greater than three years.


Meanwhile, GhanaWeb is accepting nominations for the prestigious GhanaWeb Excellence Awards – Youth Edition. Watch how you can nominate from the video below.

Source: www.ghanaweb.com