Industry: Financial Industry Region: Ghana Transaction Price: $1 million Transaction method: equity financing
Brief introduction:
Project objective: To support the establishment of a financial Sustainable development bank to increase access to financing, especially long-term financing, for viable Msmes and small enterprises.
Details:
Component 1: Long-term wholesale financing and technical assistance. This component will provide actual loans to the GhANaian Development Bank (GDB) for relending to the Ghanaian National Financial Support Agency (NFC) and technical assistance to the Ministry of Finance, the Development Bank and the NFC.
Sub-component 1.1: Line of Credit. This sub-component will provide the DBG with a long-term local currency LoC. The Finance ministry will lend to the International Development Association (IDA) in local currency.
Subcomponent 1.2: Technical assistance. The sub-component will fund technical assistance and capacity building by the Ministry of Finance, DBG and PFls. Technical assistance to the Ministry of Finance will include preparatory activities for the establishment of THE DBG as well as development fiscal policy formulation and related activities.
Component 2: Partial Credit Guaranteed (PCG) financing and digital financing platform. This component will supplement the LoC by utilizing the financial institution's own resources to finance msmes. It will support PCCW and the establishment of a digital financing platform.
Sub-component 2.1: Capitalization of THE PCG facility. While DBG's wholesale funding will improve the ability of financial institutions to provide long-term funding, it will not necessarily increase their willingness to lend to msmes.
Sub-component 2.2: Partial Credit Guarantee Arrangement technical assistance. The sub-component will finance the operation of the Pacific Century Financing facility and provide technical assistance to PFI. It supports PCCW's ongoing design studies and business plans, and will support the development of financial models and operations manuals including risk management, claims management, investment and other procedures.
Sub-component 2.3: Building a digital financing platform. The sub-component will support the establishment of digital financing platforms for msmes.
Component 3: Capital market development. This component aims to lay the foundation for the development of capital markets as a potential source of complementary long-term funding for Ghana.
Sub-component 3.1: Strengthening the SEC's legal and regulatory framework and capacity building. A strong and coherent legal and regulatory framework is a prerequisite for the safety and development of capital markets.
Sub-component 3.2: Capacity building for market operators. The technical expertise of market operators needs to be improved. This sub-component will build the capacity of market operators to ensure that they maintain the knowledge and skills needed to provide professional services to their customers.
Component 4: Project management, monitoring and evaluation. Project implementation will be mainstreamed into the mOF's institutional structure. Thus, the Ministry of Finance -- through its Ministry of Finance and Social Development -- will become the government's responsible department and coordinating body. The project will be implemented by a FSD team supported by two consultants, a project coordinator and a procurement consultant. The project team will be further strengthened by recruiting mechatronic consultants, AR environmental experts, social experts, project accountants, economic research and data analysts.