News Guide Africa

Tag: Small and Medium Enterprises (SMEs)

  • BoG targets ‘Total Financial Health’ to drive SME credit beyond payments

    BoG targets ‘Total Financial Health’ to drive SME credit beyond payments

    By Adnan Adams Mohammed

     

    The Bank of Ghana (BoG) has reiterated its commitment to driving a holistic financial inclusion agenda, declaring that true digital inclusion must move beyond mobile wallets and payments to unlock direct credit, insurance, and long-term investment for small and medium enterprises (SMEs) across the nation.

    Delivering the key remarks at the third edition of the Distinguished Digital Finance Lecture, Mrs. Matilda Asante-Asiedu, Second Deputy Governor of the Bank of Ghana, outlined the central bank’s strategic direction for scaling digital finance responsibly while ensuring no economic actor is left behind.

    “The next standard for inclusion in this country should be whether people can access credit, insurance, and investment on fair terms when they need to I am talking about total financial health, not simply whether they hold an account,” Mrs. Asante-Asiedu declared.

    Bridging the $4.8 Billion SME Credit Gap

    Addressing finance executives, fintech innovators, and industry stakeholders, the Second Deputy Governor highlighted that despite Ghana’s world-class payment interoperability infrastructure, a massive disconnect remains between digital transaction records and credit access. Ghana’s SME sector currently faces an estimated annual financing gap of nearly $4.8 billion.

    “We have built extraordinary payment rails, but we have not yet built equally extraordinary credit rails,” Mrs. Asante-Asiedu noted. “An SME owner in Kumasi can receive payment for goods in three seconds through Instant Pay, but may wait three months or longer for a working-capital loan decision because that credit consideration is not built on the same digital footprint that just proved her capacity to receive payment.”

    She emphasized that Ghana does not suffer from a capital shortage, but rather an architectural challenge regarding what financial institutions accept as collateral. She urged lenders to adapt to modern economic realities by reading alternative digital records such as mobile money histories, receivables, and signed contracts.

    “A great deal of the value being created in Ghana today sits in contracts, in receivables, and in transaction histories rather than in fixed assets, but our systems have not yet caught up with that shift,” she explained.

    A Solid Foundation for Innovation

    Ghana’s digital payments landscape has experienced unprecedented growth. Through the Ghana Interbank Payment and Settlement Systems (GhIPSS), mobile money wallets, bank accounts, and card schemes operate on a fully interoperable network.

    954 Million Transactions: Processed via mobile money platforms in June 2026 alone, with a total value of approximately GHS 493 billion.

    84.6 Million Accounts: Total registered mobile money accounts in the country, supported by 26.4 million active accounts and over one million registered agents.

    2 Million+ Users: Onboarded onto the bank-led mobile payment platform, GhanaPay, since its launch in 2022.

    To preserve stability without stifling growth, the Bank of Ghana has implemented forward-looking regulatory measures:

    Regulatory Sandbox Framework: Allows fintechs to test novel products from digital lending to insurtech under active central bank supervision.

    Digital Credit Services Directive: Licensing regime introduced to bring short-term digital lenders out of the regulatory shadows.

    Cyber and Information Security Directive (CISD 2026): Standards tailored for cloud computing, AI-driven credit scoring, and evolving cybersecurity risks.

    Microfinance Sector Modernization: Transforming 147 Rural and Community Banks under the Revised Microfinance Sector Framework 2026 to deepen last-mile delivery.

    Key Commitments for the Road Ahead

    The central bank outlined four concrete commitments to ensure digital financial innovation yields real economic growth:

    Finalize Open Banking Frameworks: Measure success by the volume of credit extended to small businesses based on transparent transaction data.

    Re-evaluate Collateral Frameworks: Expand acceptable security rules so verified receivables and purchase orders can unlock working capital.

    Harmonize Financial Regulation: Strengthen cross-sector coordination through the Financial Stability Council alongside the National Insurance Commission (NIC) and Securities and Exchange Commission (SEC).

    Democratize Cybersecurity: Provide systemic support under CISD 2026 so that smaller institutions and Community Banks can adequately withstand cyber threats.

    Closing her address, Mrs. Asante-Asiedu reminded stakeholders that digital transformation must serve ordinary citizens at the grassroots level.

    “Scale is as much a regulatory achievement as it is a technological one,” she stated. “Our task now is to make sure that the same phone that lets a market trader in Techiman send money in three seconds also lets her borrow against the business she has spent a decade building, on fair and competitive terms.”

     

     

  • Information, Innovation, and Brand Sustainability: How Ghanaian SMEs can unlock billion-dollar capital ecosystems and new markets

    Information, Innovation, and Brand Sustainability: How Ghanaian SMEs can unlock billion-dollar capital ecosystems and new markets

    By Adnan Adams Mohammed

    Small and Medium Enterprises (SMEs) form the undisputed bedrock of the Ghanaian economy, representing nearly 90 percent of all registered businesses, employing 80 percent of the workforce, and generating over 60 percent of the nation’s Gross Domestic Product (GDP). Yet, a dual crisis of “investment unreadiness” and acute information asymmetry continues to prevent thousands of these domestic enterprises from scaling.

    At major industrial forums held across the capital, including the landmark 10th Beauty, Cosmetics & Wellness West Africa Expo (The Legacy Expo), business leaders, development economists, and trade experts delivered a unified message: Ghanaian enterprises do not simply suffer from a lack of available capital. Rather, they lack the structural systems to discover existing funding mechanisms, enter untapped international markets, and cultivate sustainable corporate brands.

    Bridging the Capital Gap: It is an Information Crisis

    The prevailing narrative within the private sector has long blamed restrictive collateral requirements and high commercial interest rates for stagnation. However, development finance experts argue that a massive disconnect exists between global funding providers and local business owners. Every year, international foundations, impact investment facilities, and challenge funds commit billions of dollars to African entrepreneurship, yet a vast portion of these funds remains entirely unutilized.

    “The conversation around SME financing often focuses on the shortage of capital,” noted Joevas Asare, an Oxford-trained economist and development finance practitioner. “While this is a genuine concern, it overlooks another critical barrier that receives far less attention access to information.”

    Mr. Asare explained that this structural imbalance creates severe information asymmetry across the economy, leaving highly viable businesses completely unaware of specialized concessionary loans or grant opportunities.

    “For many entrepreneurs, the challenge is not a lack of ambition or viable business models,” Asare emphasized. “Rather, it is the significant amount of time and effort required to navigate a fragmented funding landscape. Business owners often spend weeks searching through websites and interpreting eligibility criteria, all while managing the day-to-day demands of running a company.” He urged policymakers and development partners to build unified, transparent digital directories to streamline the funding pipeline, stating, “Unlocking that potential is not simply a matter of increasing funding pools. It is also about ensuring that businesses can find, understand, and access the opportunities that already exist.”

    The Multi-Market Horizon: Scaling Beyond Boundaries

    Concurrently, local brands are being challenged to aggressively look past domestic borders to ensure long-term corporate survivability. At the opening of The Legacy Expo at the UPSA Auditorium, which drew over 300 major corporate exhibitors from South Korea, Dubai, Egypt, Turkey, Nigeria, and India, trade organizers stressed that market stagnation occurs when firms fail to innovate their consumer outreach and export strategies.

    Addressing the assembly of international delegates and local entrepreneurs, the Organizer of the Expo, Rebecca Donkor, highlighted the event’s evolution into a major vehicle for cross-border trade and brand development.

    “For ten years, we have created opportunities for businesses to showcase their products and services, discover new markets, attract customers, secure partnerships, and build sustainable brands,” Ms. Donkor stated.

    She noted that through strategic global partnerships, the platform is actively working with the Ministry of Trade, Agribusiness and Industry to place indigenous West African operations at the forefront of the global lifestyle and cosmetics marketplace. “African beauty is not merely an industry, but a powerful economic force, a cultural asset, and a vehicle for job creation, trade, empowerment, and transformation,” Donkor added, urging small businesses to transition away from localized, informal operations and embrace globally connected commercial frameworks.

    Professionalizing the Enterprise for Sustainable Growth

    To successfully capture international markets and secure private equity, investment analysts maintain that Ghanaian SMEs must undergo an internal cultural shift toward institutional professionalization. Investors frequently cite poor corporate governance, disorganized record-keeping, and a lack of a unique product differentiator as the real barriers to capital deployment, rather than a lack of liquidity in the banking system.

    Corporate advisory experts point out that many micro-enterprises operate strictly on cash systems, with essential financial margins stored entirely in the memories of the founders. Transitioning into a fundable entity requires engaging certified accounting services, establishing clear corporate structures, and formulating realistic growth projections.

    By building resilient operational foundations, upgrading information flow, and designing distinct, environmentally conscious value propositions, Ghana’s entrepreneurial sector can effectively position itself to capitalize on global trade agreements like the African Continental Free Trade Area (AfCFTA), transforming localized operations into sustainable, multi-national African brands.