The Bank of Ghana has signed a Memorandum of Understanding (MoU) with the Development Bank Ghana (DBG) to commission a study on “Innovative Financing for Micro, Small and Medium Enterprises (MSMEs) in Ghana”.

According to the Central Bank, credit is critical for every economy, particularly developing economies such as Ghana, since both theory and empirical literature point to the nexus between credit and economic growth.

Speaking at the ceremony, First Deputy Governor, Dr. Maxwell Opoku-Afari, said though price stability remains the Central Bank’s primary mandate under the inflation targeting framework, economic growth through credit expansion is also of key concern, a reason why a major consideration is given to the impact of policies on the real sector.

For instance, he explained that much of the reforms that have been initiated within the banking sector in particular, have been geared towards creating sound, stable, well-capitalised and profitable institutions capable of supporting the real sector and economic growth through increased lending.

He pointed out that “we are excited to be part of today’s landmark event, which is yet another bold initiative between the Bank of Ghana and two critical institutions in our country, the Development Bank Ghana (DBG) and the University of Ghana Business School (UGBS) to formally commission this study on “Innovative Financing for MSMEs in Ghana”.

He continued that the expectation of the study will promote understanding of and also provide anecdotal evidence on the financing challenges that MSMEs face in Ghana, the funding gap that currently exists, and also recommend new and innovative ways of closing this funding gap.

Results from the study will inform the regulator, on other ways in which financial technology firms can be used to channel resources from surplus-spending units to deficit-spending units in the economy, especially MSMEs.

Dr. Opoku-Afari assured the Bank of Ghana’s project team commitment to this collaboration with DBG and “We believe the success of this collaboration would encourage other collaborations aimed at addressing the challenges that face the financial sector in particular and the economy as a whole”.

“The Bank of Ghana also commits to observing the MoU in utmost good faith to ensure the study is successful. The Bank stands ready to support in any other way to ensure the project’s objectives are attained at the end of the day”, he concluded.