By Elizabeth PUNSU, Kumasi
GCB Bank PLC has introduced a collateral-free group loan facility aimed at easing the financial challenges faced by small-scale entrepreneurs in the country.
The initiative, launched at Kejetia Market in Kumasi, seeks to empower market women and other small business owners by providing them with access to affordable credit without the traditional requirement of collateral.
Speaking at the launch event, Executive Head of Retail Banking at GCB, Sina Kamagate, emphasised the bank’s commitment to fostering economic growth through responsible banking.
“We have various loan products for our micro and small customers, but what we have done differently with this product is to encourage the spirit of grouping and collaboration,” he said.
Under the new scheme, market women and other MSE entrepreneurs can form groups of up to 10 members and apply for loans of up to GH₵200,000.
The loan does not require collateral but is based on joint and several undertakings by group members, ensuring mutual accountability and support.
“Each member looks out for the other, creating a sense of responsibility and trust within the group,” Mr. Kamagate explained.
He further emphasised that while the group loan cap is set at GH₵200,000, the bank offers other facilities that can go as high as GH₵500m for eligible customers. However, the newly launched product is specifically tailored to meet the needs of micro and small enterprises, which form the backbone of the country’s economy.
“Research shows that 83 percent of our economy is driven by micro and small enterprises. This sector is the engine of our economic growth; and by supporting it, we are not only helping these businesses thrive but also contributing to the development of our country,” Mr. Kamagate noted.
A major feature of the MSE group loan is the interest rate of 3 percent per month, making it one of the cheapest in the industry. Mr. Kamagate stressed that the bank’s focus is not solely on profit but on building a sustainable economy.
Loan repayment
The loan repayment structure is designed to align with the cash flow of borrowers, eliminating the need for collateral. “Collateral is a secondary source of repayment. What matters most is the cash flow generated by the business. We understand our customers and their inflows, which is why we are confident in offering this facility,” Kamagate explained.
To further support its customers, GCB has deployed e-collectors who visit market centres daily to collect sales proceeds from borrowers. This innovative approach ensures that market women do not have to leave their businesses to visit banking halls, saving them time and enabling them to focus on growing their enterprises.
The only requirements for accessing the loan are a valid Ghana Card and a GCB bank account. Once an account is opened, the bank assigns an e-collector to monitor the borrower’s sales and provide tailored financial support.
The launch of the collateral-free group loan has been met with enthusiasm by market women at Kejetia, who see it as a game-changer for their businesses.
“This is a great opportunity for us to expand our businesses without the stress of providing collateral. We are grateful to GCB for this initiative,” said Nana Ama Nyarko, a trader at the market.
