Swedfund invests in Ghanaian banking sector
Introduction
Swedfund provides Fidelity Bank, an indigenous Ghanaian bank with a strong focus on small and medium sized enterprises (SMEs) a MUSD 14 long-term subordinated loan. By supporting the banking sector in Ghana, Swedfund will contribute to job creation, increased demand and private sector development.
Ghana’s economy has seen strong growth over the past six years. Despite the deceleration seen in 2013, growth has been wide-based and the economy is expected to have a robust growth trajectory in coming years.
An important factor driving this growth is the private sector, creating jobs, self-sufficiency and reducing poverty. This sector relies on local banks being able to provide required financing for establishing and developing clients businesses. Local SMEs are currently facing a challenging situation as they have come under pressure by the devaluation of the Ghana Cedi and increasing inflation rate. As SMEs represent over 90 % of all registered businesses in Ghana, an ailing private sector can lead to high levels of unemployment and further slow-down of the growth of the economy, hence the need to support the sector.
Fidelity Bank has raised a total of MUSD 60 from a consortium of European development finance institutions (“DFI”) to enable the bank’s continued growth and development of which Swedfund will invest MUSD 14.
– As a DFI we have an important role to play in this type of investment. Ghanaian banks face difficulties raising long-term funding from the market, which is necessary to ensure the sector’s continued development and stability. We are pleased to support a bank that focuses on SME’s, as this segment makes important contributions to economic development and job creation, said Fredrik Törgren, responsible for investments in Financial Institutions at Swedfund.