Zenith Bank (Ghana) Limited, a leading holistic financial services provider, and 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 business 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.
Managing Director and Chief Executive Officer of Zenith Bank Ghana, Henry Onwuzurigbo, 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 size 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 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. 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 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, 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 African Development Bank’s Affirmative Finance Action for Women in Africa (AFAWA)’s Guarantee for Growth program, 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 inclusion while addressing the gender financial gap in Ghana,” said Eyerusalem Fasika, Country Manager of the African Development Bank's Ghana Office, after the ceremony.
“The AFAWA component within this transaction will support Zenith Bank Ghana in de-risking women-led businesses within its portfolio. We’re thrilled to see AFAWA and its implementing partner, the African Guarantee Fund, grow more support from financial institutions to boost women entrepreneurs’ access to finance in Ghana," Fasika added.
The partnership also recognizes 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 business. 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.
Longstanding tradition
This partnership builds upon Zenith Bank Ghana's longstanding dedication to supporting MSMEs in Ghana. In October 2022, the Bank introduced dedicated MSME accounts and partnered with organisations like Development Bank of Ghana (DBG) and World Trade Center 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.
These initiatives demonstrate Zenith Bank Ghana's unwavering commitment to fostering an environment where MSMEs can flourish and contribute meaningfully to the Ghanaian economy.
By combining their expertise and resources, Zenith Bank Ghana and AGF are creating a powerful ecosystem that empowers MSMEs in Ghana to overcome challenges, unlock their full potential, and become the driving force of economic growth and prosperity.
About Zenith Bank
Zenith Bank Ghana is a subsidiary of Zenith Bank Plc, one of Nigeria’s strongest and largest banks by market capitalization, profitability and total assets and headquartered in Nigeria, with presence in other West African Countries, the Middle East, Asia and Europe.
Since inception, Zenith Bank Ghana has differentiated itself from competition by satisfying the changing needs and demands of customers through the deployment of cutting-edge ICT, employment of the best human capital in the industry and a firm commitment to first class customer service delivery at its 42 business locations across Ghana. The Bank is a member of the Ghana Deposit Protection Scheme. For more information, please visit: www.zenithbank.com.gh
About African Guarantee Fund
African Guarantee Fund (AGF) is a specialized guarantee provider whose mission is to facilitate economic development and poverty reduction in Africa. To achieve this, AGF increases access to finance for Small and Medium-sized Enterprises (SMEs) across key economic sectors through an array of guarantee products and capacity development assistance. Since inception, AGF has unlocked more than USD 3.5 billion in SME financing, through partnerships with 200 partner financial institutions across 40 African countries.
AGF is backed by the following shareholders and sponsors: The Government of Denmark through the Danish International Development Agency (DANIDA), the Government of Spain through the Spanish Agency for International Cooperation (AECID), the African Development Bank (AfDB), French Development Agency (AFD), Nordic Development Fund (NDF), Investment Fund for Developing Countries (IFU), German Development Bank (KfW), French Agency for Private Sector (PROPARCO), West African Development Bank (BOAD), Global Affairs Canada (GAC), USAID's West Africa Trade & Investment Hub (WATIH), TechnoServe and Mastercard Foundation. African Guarantee Fund is rated AA- by Fitch Ratings. For more information, please visit: www.agf.africa
About the Affirmative Finance Action for Women in Africa (AFAWA)
AFAWA is a pan-African initiative that aims to close the $42 billion financing gap for women in Africa through a comprehensive support. AFAWA aims to unlock $5 billion in financing for women-owned and women-led small and medium enterprises by 2026. AFAWA is supported by the African Development Bank's partners and donors, the G7 countries, the Netherlands and Sweden and the Women's Enterprise Finance Initiative (We-Fi). Through AFAWA, the African Development Bank has approved $1,5 billion of investment for women entrepreneurs in 32 countries, channeled through 96 financial institutions.
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