Small and Medium Enterprises (SMEs) are the invisible scaffolding holding Ghana’s economy together. They employ millions, drive innovation, and anchor community livelihoods. Yet, their biggest obstacle to growth remains painfully familiar — financing.
While this is not news, what’s striking is how other emerging economies have begun to close their own SME finance gaps, often with policy innovations that Ghana can adapt.
1. The Scale of the Problem
SMEs represent over 90% of registered businesses in Ghana and contribute about 70% of GDP. Despite this dominance, their access to finance remains limited. The World Bank’s Enterprise Survey shows that fewer than one in five SMEs in Ghana find it easy to obtain credit.
The IFC estimates Ghana’s SME financing gap at over US$4 billion, capital that could open up new jobs, productivity, and export capacity. High collateral requirements, interest rates exceeding 20%, and short repayment windows continue to lock most SMEs out of formal credit markets.
The question isn’t whether SMEs are creditworthy — many are. The question is whether Ghana’s financing architecture is designed to serve them.
2. What Kenya and Nigeria Did Differently
Kenya: Building Confidence through Credit Guarantees
In 2020, Kenya launched its Credit Guarantee Scheme (CGS) , a public fund that shares lending risks between banks and government. Within its first year, the scheme helped release over US$100 million in loans to small businesses, particularly in manufacturing and agribusiness. https://www.treasury.go.ke/cgs/
By covering up to 25–50% of loan losses, the scheme gave banks a safety net to lend to first-time SME borrowers. Kenya paired this with digital credit scoring tools and centralized reporting to track performance — creating both confidence and accountability.
Lesson for Ghana:
A national guarantee scheme, if managed transparently and integrated with bank lending data, can rapidly scale SME lending without distorting the credit market.
Nigeria: Creating a Purpose-Built Development Bank
Nigeria took a different route with the Development Bank of Nigeria (DBN), launched in 2017. The DBN doesn’t lend directly to businesses; instead, it provides wholesale financing to partner financial institutions, which then lend to SMEs. https://www.devbankng.com/
The model ensures risk is shared and capital is recycled efficiently. In just a few years, DBN financing has reached over 250,000 MSMEs, backed by capacity-building programs to improve creditworthiness.
Lesson for Ghana:
Ghana can empower its own development finance institutions such as EXIM Bank or GEA to operate on a wholesale, risk-sharing model, leveraging concessional capital and technical support to reach thousands more SMEs.
3. The Digital Game Changer: Fintech and Data
Across Africa, fintech platforms are rewriting SME finance. Companies like M-Kopa (Kenya) and Carbon (Nigeria) are using alternative data, that is, transaction history, mobile payments, inventory turnover to assess creditworthiness and disburse loans in minutes, not weeks.
In Ghana, fintech adoption is strong (mobile money transactions exceed GH₵ 1.2 trillion annually), yet few providers focus on SME credit. Policy incentives and sandboxes could help Ghana replicate Kenya’s model of blending fintech innovation with traditional bank supervision.
Lesson for Ghana:
Ghana can encourage fintech lending to SMEs through regulatory sandboxes, while promoting data-sharing frameworks that ensure responsible lending and consumer protection.
4. What Ghana Has — and What’s Missing
Ghana isn’t starting from zero. Programs like the Ghana Enterprises Agency’s SME Support, MASLOC, and YouStart are important, but they remain fragmented.
The missing piece is coordination and scalability, linking public funds, private banks, and development finance into a unified framework. A national SME financing roadmap could set targets, reporting standards, and performance metrics for all actors.
5. Some Key Recommendations
- Establish a Scalable Credit Guarantee Fund
– Target 20–30 banks and MFIs; automate claim processes; ensure transparency.
– Draw lessons from Kenya’s CGS and South Africa’s SME guarantee models. - Strengthen Development Finance Intermediation
– Convert part of public SME funding into wholesale lines through DFIs, incentivizing partner banks to lend downstream.
– Introduce performance-based incentives tied to SME lending growth. - Expand Fintech-Enabled Credit
– Create a digital SME finance sandbox with BoG supervision.
– Encourage data-driven scoring and open banking for SMEs. - Embed Risk Management & Capacity-Building
– Pair loans with enterprise-risk training.
– Offer partial subsidies for SMEs to adopt ERM or digital accounting tools. - Institutionalize an SME Finance Policy Framework
– Align GEA, EXIM, and MoF programs under a single results-based policy dashboard.
– Make SME finance targets part of Ghana’s medium-term economic development plan.
6. The Bottom Line
Ghana’s SMEs don’t need handouts; they need systems that understand their realities. The examples from Kenya, Nigeria, and elsewhere show that the right combination of risk-sharing, institutional innovation, and digital transformation can uncover billions in productive finance.
SMEs already fuel Ghana’s economy — it’s time the financial system was re-engineered to fuel them back.
Question for reflection:
If Ghana could adopt just one policy tool from Kenya or Nigeria, which would create the biggest impact — a credit guarantee fund, a wholesale SME bank, or a digital-lending ecosystem?
Let’s start the conversation from there.
