The agreement is expected to help the MSMEs address some of the major challenges which include lack of access to loans and managerial capacity, inadequate collateral and poor record keeping among others.

With the support from the AGF and Zenith Bank, Ghana, beneficiaries will have access to technical support to overcome the challenges.

For a start, 100 MSMEs would benefit under the agreement with about 300 MSMEs benefitting from the agreement within the first one year period.

An agreement for the partnership has been signed in Accra, to start off the initiative which will focus on MSMEs that are into agriculture, manufacturing, trade and education in line with Ghana's developmental goals and economic growth strategy.

The signing ceremony attracted significant dignitaries including the Deputy Director, Banking Supervision of the Bank of Ghana, Ismail Adam, who represented both the Second Deputy Governor and Head of Banking Supervision of the Bank of Ghana.

The former Minister of Finance, Ken Ofori-Atta, was represented by the Director, Financial Sector Division, Sampson Akligoh.

Challenges, partnership

The Managing Director and Chief Executive Officer(MD-CEO) of Zenith Bank, Henry Onwuzurigbo, explained that there existed the supply side of the challenges facing MSMEs.

These include high transactional costs, limited understanding by some service providers of the nature and operations of MSMEs.

He said other constraints to effective functioning of the MSME sector in the country was infrastructure deficit including power and transport, weak intellectual property protection and contract enforcement.

He explained that the partnership was a promise to unlock the full potential of MSMEs and pave the way for innovation and job creation to build a brighter future for all Ghanaians.
 

Economic propellers

Mr Onwuzurigbo, described MSMEs as “crucial drivers of our economy employing over 80 per cent of the workforce and contributing to more than 70 per cent of the private sector output, surpassing global averages".

The MD-CEO equally revealed that small enterprises numbering 320,000 generate approximately six jobs per enterprise, while medium enterprises though fewer at 85,000 contribute significantly with an average of around 46 jobs each.

These statistics, he said, underscored vital role of MSMEs in creating jobs and sustainable economic development in the country.

The MD-CEO revealed that “we introduced dedicated MSME accounts, collaborated with VISA to roll out the Zenith SME business card and partnered esteemed organisations like Development Bank Ghana and World Trade Centre, Accra to provide access to finance training and funding”.

Successful banking

The Director - General of AGF West Africa, Bendjin Kpeglo, said MSMEs were everywhere around us and that there was no way to be a successful bank in Ghana without doing business or supporting MSMEs.

“This agreement can help to address the needs of MSMEs by providing immediate financial guarantee and technical assistance,” stating that they would provide capacity development to the MSMEs and boosting the economy as a whole and access to finance.

“We will provide technical assistance to both the bank and the MSMEs” he stated.

Mr Kpeglo explained that priority would be given to women in the MSME sector because “beyond this the bigger part of the economy is led by women.

Investing in women is investing in growth. As a guarantee provider we have to partner the bank to support more women.”