In a bid to reach out to the grassroot businesses who are vital components of the Small and Medium-sized Enterprises (SMEs) sector, Development Bank Ghana (DBG) partnered with Sinapi Aba Savings & Loans, an indigenous microfinance institution which offers financial services to businesses predominantly located in the rural areas. The partnership which was signed in October 2023 has already began yielding immense results for business owners who have benefited from the allocated GHS15million DBG facility to Sinapi Aba.
Coming on as the first microfinance institution to partner DBG as a Participating Financial Institution (PFI), Sinapi Aba’s collaboration with the wholesale bank-modeled development bank has given strong hints of living up to expectation as it has already started delivering much-needed support to local businesses in the rural areas who hitherto were marginalised and encountered challenges in accessing facilities from commercial banks.
Through this approach, DBG seeks to mitigate, and where possible eliminate, the challenge of lack of access to financial support to numerous local businesses at the grassroot-level who require funding with longer time span. This partnership therefore makes available the DBG-arranged patient capital for these businesses to grow and expand.
Beneficiaries like Linda Osei Agyemang, the proprietor of Augusma Educational Complex in the Ashanti Region, who by virtue of the partnership, received funding has been able to expand her school by building additional classrooms thus offering her the opportunity to increase the number of students on roll. Similarly, Kwame Owusu Ansah, who is the owner of City Life Hybrid School also in the Ashanti Region has benefited from the partnership by securing a long-term loan to purchase a School Bus. By this, Kwame is able to offer students of his institution decent transportation to and from school and a readily available mode of transportation for field trips and other off-site learning activities.
Mr. Kwabena Amofa, Chief Executive Officer of Royal Company, a rice mill factory in Mampong Ashanti, indicated that he was initially skeptical about the benefits to clients like his company as a result of the DBG-Sinapi Aba partnership after seeing the story online. Today, he is glad that he went to the Sinapi Aba office to verify because his company is currently a beneficiary of a DBG facility. Full of praise for the partnership and what it offers local businesses like Royal Company, Mr. Kwabena Amofa says “but for the intervention of DBG, we would have not been able to secure a long-term loan for our business simply because all other banks regard our business as high-risk and are hesitant about offering us facilities to fund our business. Today, I am able to employ more hands, particularly women, to help with the packaging of our product as well as expanding other operations of our business”.
The partnership between the two institutions affords DBG the opportunity to tap into Sinapi Aba’s network of 44 branches located in 14 of the 16 regions of Ghana. This further offers DBG the window to reach the 65 percent of Sinapi Aba Saving & Loans’ customers who are in the rural areas and to offer them support with much-needed long-term capital for business growth. Sinapi Aba on the other hand will receive wholesale capital which it will on-lend to its base of SME customers, majority of whom are in the rural areas as patient-capital.
Development Bank Ghana is a wholesale financial institution established by the Government of Ghana. DBG acts as a provider of long-term capital to the market with a mission to foster strong partnerships to finance economic growth, create jobs, and build capacity for SMEs. The organisation is committed, aligned and strengthened to achieve UN Sustainable Goals (SDGs) ambitions and targets while implementing environmental, social, and governance (ESG) strategy aimed at creating shared value and impact with purpose.