Managing Director of the Consolidated Bank Ghana Limited (CBG), Daniel Wilson Addo, has expressed strong optimism that growing confidence in the economy’s banking sector provides an opportunity for CBG to continue supporting the growth of Micro Small and Medium Scale Enterprises (MSMEs), hand-holding them into big businesses that anchor development. This, he said, will deepen the bank’s support to government policies in creating a prosperous economy.
To achieve this feat, CBG has spent a lot of time with MSME customers to understand their needs by developing various collaborative relationships. This has enabled the bank to provide the MSMEs with financial products tailored to meet their core needs.
Lack of collateral emerged as the major reason why MSMEs are unable to get the needed support to grow their business. To overcome this challenge, CBG developed a bouquet of products, that are self-liquidating in nature, with the ultimate source of their repayments based on the historical cash flow generation ability of the business.
In addition, the bank has invested in a loan processing platform that has enhanced the ease of doing business with MSME clients and given them access to unsecured financing within one week. This was not possible hitherto. The innovation has given MSME clients the comfort and hope that once they consistently channel their revenues through the bank, they can rely on CBG for quick financial support to grow their businesses.
Whether these MSMEs are importers needing pre-shipment financing or smaller exporters struggling to execute an export contract won, to the table-top vendor with an ambition to operate a market stall – CBG has chosen to stand with these categories of clients with unsecured products which do not require provision of financials.
CBG has already hit the GH¢1billion mark in supporting individuals and MSMEs in 2021, and looking further into 2022 the bank has set aside GH¢600million to strengthen its support for MSMEs to positively impact over 50,000 businesses.
CBG has also collaborated with Ghana Enterprise Agency (GEA) to disburse their concessionary loans programme dubbed the Coronavirus Alleviation Programme Business Support Scheme (CAP Buss).
This collaboration forms part of the bank’s strategy to help MSMEs access low-interest rate loans, so as to help them bounce back from the effect of COVID-19. To date, CBG has disbursed concessionary loans to over 34,000 SME recipients valued at GH¢154million, and is poised to play a major role in future disbursements of GH¢1billion concessionary loans under the Youth and Employment programme of government in collaboration with the GEA.
MSMEs in Ghana play an important role as the engine of growth for the economy, contributing about 70 percent of the country’s Gross Domestic Product. They also account for 85 percent of the manufacturing sector as well as 75 percent of employment in other sectors. This makes MSMEs extremely important to the national economy.
To digitally transform the bank’s micro loans to MSMEs, CBG in collaboration with Vodafone (Ready Loan) achieved the unique result of lending to over 150,000 individuals as at October 31, 2021.
The support for SMEs will not be limited to giving out loans, but also offer training that enhances the brand, business strategy, bookkeeping and sustainability of the bottom-line of its SMEs in Ghana. To achieve the 2022 ambition, CBG will launch two dedicated SME centres in Accra and Kumasi; and deepen the partnership with Telecommunication companies to roll out digital lending as well as savings products.
CBG, as a Policy bank, has the core mandate to support the MSME sector’s growth via its digital agenda, to achieve the ambition of being the Best MSME bank in Ghana by 2023, through its 114 branches.
