“This therefore requires the Board and Management to work hard toward getting an international rating for the bank within the shortest possible time,” he said last week during the launch of the DBG in Accra.

DBG is a development finance institutions and a whole-sale bank with the mandate to provide long-term loans to commercial banks to on-lend to Small and Medium-scale enterprises.

With the capital base of nearly $800 million, the shareholders of DGB are Government of Ghana, providing $250 million; KFW, providing 48.5 million euros; the World Bank, proving $225 million; the European Investment Bank, providing 170 million euros and the AFDB, providing $40 million. 

Mr Ofori-Atta said development banks had been powerful instruments in economic transformation and growth in several countries.

“There are many countries where development banks have failed to live up to expectations and so in setting up DBG, we looked at all these experiences, including our experiences in Ghana and it is clear to us that the big differentiator for success is the governance of the institution and the professionalism with which they are run,” he said.

The Finance Minister said DBG was designed to be financially sustainable and it would focus predominantly on economic transformation, particularly industrialisation and value-addition in agriculture.

“It will also support businesses in technology, tourism and high value services.  The aim will be to focus on SMEs and relatively large Ghanaian corporations in these sectors to help transform the economy and create jobs,” he said.

He said President’s vision for Ghana’s economic transformation required long-term investment led by the private sector, hence the need to provide the private sector with access to long term financial competitive rates. 

“Currently, in our country this is not readily available especially for Ghanaian SMEs. For example, evidence from the feasibility study conducted for the set-up of DBG showed that only 11 per cent of bank credit is more than 5 years. Also, less than 8 per cent of credit goes to manufacturing, and less than 4 per cent to agriculture, two of the sector critical to economic transformation. It is this gap that DBG has been created,” he explained.

Mr Ofori-Atta hinted that the DBG will transform the economy by “the provision of long-term finance to economic units operating in the productive sectors of the economy at competitive interest rates, provide funding facilities with tenures of up to 15 years, lend funds to participating financial institutions for on-lending to SMEs, operate a partial guarantee window, operate a digital platform to facilitate factoring of invoices by SMEs.”

The Finance Minister revealed that as means to ensure the growth and success of the DBG, the government together with the BoG created a taskforce of senior public and private sector experts to provide guidance on the set-up of the bank including overseeing the feasibility study conducted by PwC, which was selected through an international competitive process.

The guidelines he said were that the, “DBG must be a non-deposit taking wholesale bank, it should neither give retail nor direct business loans, it should provide funds to the existing commercial banks and other qualifying financial institutions in the capital market to provide long-term lending and other innovative products that are presently lacking in the system.”

“DBG should complement and strengthen the operations of existing financial institutions by making available adequate long term funding, it should be regulated,” he added.