The AfDB approves a €15 million credit line to support SMEs in Ghana
UT Bank Ghana will receive a $20 million (€15 million) line of credit from the African Development Bank (AfDB) to support the trade finance activities of small and medium-sized enterprises (SMEs) in Ghana, it has been revealed.This initiative is aimed at fostering financial sector development,
regional integration through intra-African trade, and
to government revenue generation, The Chronicle reports.
It is expected to facilitate approximately $140 million (€107 million) of trade in essential raw materials, intermediate and finished goods, and equipment to support economic growth in Ghana, thus promoting inclusive growth.
A study conducted by the University of Ghana estimates that small enterprises in Ghana contribute about 70 percent to Ghana’s GDP and represent 92 percent of businesses in the country.
This line of credit follows the signature on May 22nd
of an Fcfa50.7 billion (€77.3 million) Unfunded Risk Participation Agreement (RPA) between the AfdB and Commerzbank in a bid to boost trade finance in Africa.
The two banks will share the default risk on a portfolio of qualifying trade transactions originated by issuing banks in Africa and confirmed by Commerzbank.