Bank of Ghana transforms SME financing with digital infrastructure

The First Deputy Governor at the Bank of Ghana, Maxwell Opoku-Afari has highlighted the bank's progress in leveraging digital infrastructure to address key challenges facing Small and Medium-sized Enterprises (SMEs) in Ghana.

Speaking as a panel member at the just-ended Global SME Finance Forum 2024 in São Paulo, Brazil, Mr. Opoku-Afari deliberating on the topic "A Regulatory Dialogue on SME Finance" noted that the Central Bank in collaboration with the Monetary Authority of Singapore and Development Bank Ghana, introduced the Ghana Integrated Finance Ecosystem (GIFE) in its regulatory sandbox. GIFE utilizes digital footprints to establish intent-to-pay, enabling banks to provide collateral-free loans to SMEs.

According to him, this innovative approach has already yielded impressive results. Over GHC 8 million in collateral-free loans have been disbursed to 20 SMEs, with over 1000 pending loan applications worth GHC 233 million.

He also explained the pivotal role Artificial Intelligence (AI) plays in enhancing SME productivity and overcoming financing barriers, such as lack of credit history and collateral, and stressed the importance of collaboration between governments, regulators, and financial institutions to ensure inclusive and sustainable AI-driven solutions for SMEs.

The discussion delved into AI applications, ethical considerations, data privacy, and cybersecurity standards.

By:  Nana Appiah Acquaye