The entry of African Trade Insurance Agency (ATI) into the Ghanaian market is a good omen for businesses in the country.

ATI was founded by governments across Eat Africa to predominantly provide political risk, credit insurance and surety insurance with a shareholding valued at US$17.6million. Last year (2019), it insured transactions across Africa valued at US$6.4billion and expects to insure much of its pipeline transactions in Ghana valued at US$1.2billion. What this essentially means is that local banks will now have the capacity to provide more loans for local businesses at competitive interest rates, knowing that they have huge insurance cover to mitigate against any risk – thereby generating more jobs and boosting private sector growth.

Finance Minister, Ken Ofori-Atta, also added his voice and said the country’s association with ATI will help banks support SMEs to expand. SMEs in the country have long complained about their inability to access credit to expand their businesses, and local banks have also complained about the credit-worthiness of SMEs since their rate of honoring loans is nothing to write home about.

Now that ATI is there to back their operations, we can be sure that SMEs will receive the attention due them so they consequently expand their operations and employ more people. ATI’s presence will help to increase banks’ access to credit insurance.

With ATI, banks will therefore potentially gain additional and improved revenue streams while at the same time help the Ghanaian economy grow. ATI also supports trade by insuring exporters seeking to expand into new markets by protecting them against payment risks with new trading partners; and also insures foreign importers providing critical inputs into the country that will, in turn, help local manufacturers scale-up.

It is for these aforementioned reasons that the entry of ATI into the Ghanaian market brings a lot of hope for economic activity in the country. Local banks now have no excuse not to extend credit to the SME sector which has been starved of funds.