Small and Medium Enterprises (SMEs) are set to benefit from a US$10million credit facility agreement between Société Générale Ghana Limited (previously SG-SSB) and Proparco, a subsidiary of the Agence Française de Développement.

At a short ceremony in Accra, Managing Director of Société Générale Ghana Limited, Gilbert Hie, said the growth of the Ghanaian economy in recent years has increased the demand for long-term funding.

“There is a lack of funds for CAPEX (capital expenditure) investments and infrastructure funding. This seven-year loan agreement with Proparco will allow the bank to meet the growing need for long-term resources by our clients,” he said.

“This project, which stands in line with a particular engagement of Proparco in the Ghanaian banking sector, will foster long-term investments in the country. It will, more globally, support the development of small and medium enterprises -- which are sources of employment and levers of growth,” he added.

Chief Executive Officer of Proparco, Claude Périou said the banking sector of Ghana is showing good fundamentals and encouraging prospects. “In the last 10 years, Ghana has made substantial progress in developing and improving the stability of its banking system.”

He added that new regulations and guidelines have notably made the sector more efficient, innovative, and profitable.

“The recent round of successful capital increase has further strengthened Ghanaian banks. With an improved business environment and a dynamic private sector, the need for long-term financing is substantial.

“Proparco is very happy to renew its cooperation with Société Générale Ghana. This credit facility will increase the availability of long-term financial resources in the country and will enhance the financial depth of the banking sector.”

French Ambassador Frédéric Clavier said the agreement is a result of the recent visit by President John Dramani Mahama to France and is a new proof of France’s commitment to help the growth of the Ghanaian economy.

“We all know how access to credit is key to economic development by fostering capital expenditures in companies. Through this financing, Proparco will provide long-term financial resources that can be on-lent to private companies in order to address this issue.

“Moreover, due to the fact that this financing is in foreign currency, the interest rate should be lower than what the local market can make available.”

Proparco catalyses private investment in emerging and developing countries with the aim of supporting growth, sustainable development and the achievement of the Millennium Development Goals.

Since 1990, Proparco has invested €230million in Ghana. Last year, it invested about US$250million in the sub-region, out of which Ghana benefitted from about US$50million. Next year it plans to invest between US$20million and US$50million.

Ghana is the second-highest beneficiary of Proparco facilities -- right on the heels of neighbouring Ivory Coast, which incidentally houses the institution’s head-office.

Other banks and institutions that have benefitted from Proparco’s facilities include CAL, Fidelity, HFC and Ghana Home Loans.