Small and medium enterprises (SMEs) account for 92% of enterprises in Ghana, driving 70% of the country’s GDP and accounting for 83% of employment. Key challenges SMEs are facing are access to finance due to low bank financing (interest rates as high as 30%, bureaucratic hurdles, collateral requirements), limited awareness and perception of high costs for private equity/venture capital options and SMEs are comparatively unattractive and difficult to lend to and invest in due to knowledge gaps on the SME and investor side. This translates into domestic credit to the private sector of 10% of GDP against an OECD average of 102%.

The program aims to improve SMEs access to finance allowing them to create quality jobs, contributing to productivity, sustainability and economic inclusion. This shall be achieved by a comprehensive approach through providing capacity building and improving the investment ecosystem which is in its nascent stages. To support this ecosystem building of investors and investment-ready SMEs, the program will support funds, financial institutions, business service providers, transaction advisors and investment ecosystem stakeholders through capacity building. This will lead to an increasing number of investment-ready SMEs, investors adopting organizational innovations enabling them to invest in SMEs and improve know-how, development finance institutions to network and set-up systems and pension trustee administrators to detect SME investment opportunities in Ghana.

Outcome 1: SMEs improve their performance and/or growth

Outcome 2: Funds increase investment flows to target SMEs in Ghana

Outcome 3: Private capital funds and financial institutions attract additional funding to invest or on-lend to SMEs

Intermediate outcome 1: Increased quality and quantity of investable SMEs

Intermediate outcome 2: Private capital funds and financial institutions adopt organizational innovations that enable investments into SMEs and to receive investments from other investors

Intermediate outcome 3: Development finance institutions and pension trustee administrators demonstrate capability to invest in impactful opportunities in Ghana

Expected results:  

Output 1: companies use the technical assistance to increase their knowledge

Output 2: market level actors provide quality and affordable advisory to SMEs consistent with fund manager requirements

Output 3: the program and investment ecosystem stakeholders provide investment education and matchmaking opportunities for SMEs, funds, financial institutions, pension trustees and others allowing them to better seize investment opportunities

Output 4-6: private capital funds, pensions and financial institutions play a key role for local capital market development and in the local financing space

Results from previous phases:  

none