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Development Bank Ghana (DBG) is poised to diversify its financial services by introducing an equity fund to complement its lending activities.

DBG’s Chief Executive Officer, K. Duker, revealed that the bank is in its final stage of establishing the equity fund aimed at providing a more comprehensive range of financial products to benefit both institutions and borrowers at various stages of development.

“We’re in the closing stage of providing an equity fund. It’s going to be small to start off with; but again, when the only thing you can do is lend, guess what? everything looks like a loan, and that’s not the case. So, we need to have other products,” Mr. Duker stated, emphasising the importance of diversifying DBG’s offerings.

“At the moment, we are in the closing stage with the regulators to set up an equity fund, which will then allow us to have even more patient-capital. So, we can have equity, we can have loans among others., and the other products that we’re coming to the market with. But they’re all intended to provide a virtuous circle of different products that are applicable at different times of an institution’s life or a borrower’s life.”

Since its inception in June 2022, DBG has been committed to fuelling Ghana’s economic growth and development, already disbursing an impressive GH¢731million across various sectors. Mr. Duker outlined the bank’s vision for the future, stating: “Our vision is clear, and our processes streamlined. With our enhanced lending system we’ve become more efficient, enabling swifter disbursements to our partners. By the end of 2023, we aim to have disbursed a staggering GH¢1billion”.

DBG’s focus extends beyond becoming the largest lender in Ghana, Mr. Duker stressed; their commitment is to transforming the private sector. “If I become the largest lender without transforming the private sector, I would have failed,” he added.

Established by government, DBG serves as a Development Finance Institution with the primary goal of facilitating and strengthening longterm financing for Ghanaian businesses. Beyond financial services, DBG is dedicated to delivering appropriate non-financial support to enhance the country’s business ecosystem while adhering to sustainable and global best practices.

Mr. Duker reaffirmed DBG’s dedication to supporting the growth of small and mediumsized enterprises (SMEs), job creation and promoting inclusive and sustainable development in Ghana. To achieve this, the bank plans to expand its network of participating financial institutions (PFIs) by identifying and onboarding new PFIs. The goal is to have at least ten PFIs by end of the year, with Sinapi Aba being the latest addition to the network alongside existing partners such as Ecobank, Absa and Zenith

Bank.

In April of this year, DBG made headlines when it announced a seed fund of US$70million for its partial credit guarantee scheme – designed to provide additional support for Participating Financial Institutions (PFIs) to manage risks associated with loan defaults. This scheme aims to encourage more investments in high-risk sectors of the economy, bolstering the PFIs’ ability to effectively serve the SME sector while sharing the risk of investment with DBG.

“As we move forward, we will rely on the support of all our banking partners in our initiative to digitally transform financial services,” Mr. Duker emphasised, highlighting DBG’s commitment to innovation. “We seek your continued support as we aim to be a conduit for financial institutions to collaborate on innovations, such as common underwriting standards and co-creating robust alternative credit scoring models. These joint efforts will allow us to better-serve the needs of businesses while also promoting prudent lending practices and risk management within our industry.”

DBG’s expansion into equity funding represents a significant milestone in the bank’s mission to drive economic growth, foster innovation and support the transformation of Ghana’s private sector. With a clear vision and strategic initiatives, DBG is poised to play a pivotal role in shaping the future of Ghana’s financial landscape.

At a presidential breakfast meeting on agriculture and agribusiness financing held at Kempinski Hotel, Accra on Monday, the Minister for Food and Agriculture, Dr. Bryan Acheampong principally created awareness about the opportunities that exist for the participation of financial institutions in the PFJ 2 programme, especially when the sector is operating under the capacity to contribute effectively to the development goals of the country.

Addressing farmers and financial institutions, Dr. Bryan said in the last six months, the Ministry of Food and Agriculture spent considerable time appreciating the potential and challenges of the agriculture sector.

According to Dr. Bryan, his expectations have been far exceeded by the existing potential of the sector which he said can easily change the fortunes of Ghana if fully tapped.

“They include abundant arable land for crop production, especially the virgin valleys suitable for rice production, good soils for the production of a variety of crops, water resources for irrigation, favourable weather, diversity of food commodities, ready markets for exports, and numerous avenues for job creation along the agriculture value chain.”

Dr. Bryan indicated that the new initiative for delivering the strategic national objectives and vision for agriculture, known as PFJ 2, is the second phase of the Government’s flagship program, Planting for Food and Jobs, launched in 2017.

“The enormity of leading the charge to transform Ghana’s agriculture through the new strategy has never been lost on him right from the assumption of office.”

“It was also noted that, on the downside, the challenges impeding the growth and development of agriculture are in two categories. The first are factors for which we have little or no control such as drought, floods, pests, and diseases. Conversely, the second are factors which are mainly self-inflicted and a drawback to our efforts. These include misplaced priorities, weak policy implementation, limited infrastructure, undeveloped supply chains, high price volatility, low application of standards for markets, limited use of evidence-based policies, limited support for commercial farming, and the general lack of appreciation of the enormous potential of agriculture. ”

“The introduction of PFJ 2 is therefore a logical response to the situation. The new intervention seeks to revolutionize Ghana’s agriculture through the delivery of smart and innovative solutions to problems. It addresses the critical issue of input supply to farmers at barely any cost to the Government. It will scale up food production and improve efficiency throughout the entire agriculture value chain, from farm to fork.”

“Critically, PFJ 2 recognizes the potential contribution of all actors along the agriculture value chain to make the programme a success. Provision has therefore been made for onboarding financial institutions to effectively contribute their quota to the programme,” the minister added.