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 long-term 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 medium-sized 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.