Development Bank Ghana set to diversify financial offerings by introducing equity fund alongside lending activities.

DBG’s Chief Executive Officer, K. Duker, unveiled the bank’s plans for this equity fund, aimed at expanding the range of financial products available to both institutions and borrowers at different stages of development.

DBG, established in June 2022, has already disbursed GH¢731 million across various sectors, contributing to Ghana’s economic growth and development. Mr. Duker shared the bank’s vision for the future, stating, “Our vision is clear, and our processes are streamlined. With our enhanced lending system, we’ve become more efficient, enabling faster disbursements to our partners. By the end of 2023, we aim to have disbursed an impressive GH¢1 billion.”

“We’re in the final stages of launching an equity fund. Initially, it will be relatively small, but when your only tool is lending, everything seems like a loan, which isn’t always the case. So, we need to offer other products,” emphasized Mr. Duker.

“We are currently in the final stages of regulatory approval to establish an equity fund, which will provide us with more patient capital. This will allow us to offer equity, loans, and other products to the market, creating a virtuous circle of diverse products suitable for different stages of an institution’s or borrower’s journey.”

DBG’s focus extends beyond becoming the largest lender in Ghana, emphasizing its commitment to transforming the private sector. Mr. Duker added, “If I become the largest lender without transforming the private sector, I would have failed.”

Established by the government, DBG serves as a Development Finance Institution with the primary goal of facilitating and strengthening long-term financing for Ghanaian businesses. Beyond financial services, DBG is dedicated to delivering appropriate non-financial support to enhance the country’s business ecosystem while adhering to sustainable and global best practices.

Mr. Duker reaffirmed DBG’s dedication to supporting the growth of small and medium-sized enterprises (SMEs), job creation, and promoting inclusive and sustainable development in Ghana. To achieve this, the bank plans to expand its network of participating financial institutions (PFIs) by identifying and onboarding new PFIs. DBG aims to have at least ten PFIs by the end of the year, with Sinapi Aba being the latest addition to the network alongside existing partners such as Ecobank, Absa, and Zenith Bank.

In April of this year, DBG made headlines when it announced a seed fund of US$70 million for its partial credit guarantee scheme. This scheme was designed to provide additional support for Participating Financial Institutions (PFIs) to manage risks associated with loan defaults. The initiative aims to encourage more investments in high-risk sectors of the economy, strengthening the PFIs’ ability to serve the SME sector while sharing the risk of investment with DBG.

“As we move forward, we will rely on the support of all our banking partners in our initiative to digitally transform financial services,” Mr. Duker emphasized, highlighting DBG’s commitment to innovation. “We seek your continued support as we aim to be a conduit for financial institutions to collaborate on innovations, such as common underwriting standards and co-creating robust alternative credit scoring models. These joint efforts will allow us to better serve the needs of businesses while also promoting prudent lending practices and risk management within our industry.”

DBG’s expansion into equity funding marks a significant milestone in the bank’s mission to drive economic growth, foster innovation, and support the transformation of Ghana’s private sector. With a clear vision and strategic initiatives, DBG is poised to play a pivotal role in shaping the future of Ghana’s financial landscape.

Source: Ghana Business

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