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SMEs are the backbone of Ghana’s economy: Absa Bank launches initiative to address finance gap

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Absa Bank Ghana Limited has launched the “Absa SME loan at 10%” initiative to address the perennial challenge of SMEs’ access to finance. Second Deputy Governor of the Bank of Ghana (BoG), Elsie Addo Awadzi, speaking at the launch of the initiative, highlighted the importance of SMEs in Ghana’s economy, accounting for over 92% of all businesses and contributing about 70% to the country’s GDP. However, access to finance remains a major challenge for SMEs, hindering their growth and role in socio-economic development.

The Absa SME loan at 10% initiative is designed to address the SME finance gap by scaling up the volume of loans to SMEs, pricing loans at 10%, requiring no collateral for loans up to Gh¢ 1 million, and supporting borrowers with much-needed capacity building and business support services.

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Elsie Addo Awadzi commended Absa Bank Ghana and Mastercard Foundation for the initiative, calling it revolutionary and a lifeline for Ghanaian SMEs. She also challenged Mastercard Foundation to deepen its partnership with Absa Bank Ghana to ensure that more SMEs benefit from the initiative.

She further encouraged SMEs to take advantage of the opportunity provided by the partnership between Absa Bank Ghana and the MasterCard Foundation to scale up and build more sustainable and resilient businesses. SMEs should aim to venture more into manufacturing to make the economy more self-sustaining and withstand external shocks.

All in all, the Absa SME loan at 10% initiative is a groundbreaking and laudable initiative that would benefit SMEs. It is expected that even lower interest rates will be offered to SMEs with time, especially as inflation continues on a downward path. The Bank of Ghana remains committed to promoting economic growth, financial stability, and the effective and efficient operation of the banking and credit systems in the country.

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