Development Bank Ghana (DBG) is set to broaden its financial offerings by introducing an equity fund to supplement its lending operations.

DBG's Chief Executive Officer, K. Duker, disclosed that the bank is in the advanced stages of establishing the equity fund, with the objective of offering a more extensive array of financial products to cater to the needs of both organizations and borrowers at different development stages.

“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.”

DBG has been committed to fostering Ghana's economic growth and development since its founding in June 2022, and has already distributed an astounding GH731 million across several industries. Mr. Duker described the bank's future goals, saying:“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 the government, Development Bank Ghana (DBG) functions as a Development Finance Institution, primarily dedicated to facilitating and reinforcing long-term financing for Ghanaian businesses. Beyond its financial services, DBG is committed to providing relevant non-financial support to enhance the country's business environment, all while adhering to sustainable and global best practices.

Mr. Duker has reiterated DBG's commitment 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 has plans to expand its network of Participating Financial Institutions (PFIs) by identifying and bringing on board new PFIs. The objective is to have a minimum of ten PFIs by the 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 gained attention when it announced a seed fund of US$70 million for its partial credit guarantee scheme. This scheme is designed to offer additional support to Participating Financial Institutions (PFIs) in managing risks associated with loan defaults. The scheme's aim is to stimulate more investments in high-risk sectors of the economy, bolstering the PFIs' capacity to effectively serve the SME sector while sharing the investment risk 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.”

A major step toward the bank's goal of promoting economic growth, encouraging innovation, and aiding in the transformation of Ghana's private sector is the DBG's entry into equity funding. DBG is well-positioned to play a significant role in influencing the future of Ghana's financial sector because to its clear vision and strategic plans.