The African Development Bank (AfDB) is to provide a partial credit guarantee facility of US$24mn for export-orientated SMEs in Ghana. It is also providing a US$1mn grant for technical assistance, which is being funded by a grant from the fund for African private sector assistance (FAPA), supported by the government of Japan.
The funds will particularly focus on exporting SMES that produce non-traditional products whose financing needs are too small for corporate loans, but are larger than micro-loans.
This programme is in line with AfDB's bank strategy for private sector operations which outlines a number of key aims: to provide an innovative market-based risk-sharing mechanism to support SME development; to reduce the high risk perception of SMEs in banks; to redirect some of the capital held by banks in liquid assets towards productive private sector firms; and use partner banks to implement partial credit guarantee facility.
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