Universal Merchant Bank (UMB) has been named among other universal banks with the lowest interest rate on loans offered to small and medium scale enterprises in the country, according to the Bank of Ghana “Annual Percentage Rates (APR)” report.

The central bank’s 2021 Annual Percentage Rates (APR) report revealed that “on loans offered to SMEs, First National Bank, UBA and UMB offered the lowest lending rates of 19.52%, 19.56%, and 21.80% respectively for one-year tenor.”

UMB has been at the forefront of providing funds for start-ups and SMEs as part of the bank’s support to the government’s youth entrepreneurship drive and private sector revitalization.

The UMB Centre for Businesses and UMB PPP Incubator Centre initially launched in 2017, are the bank’s response to the gap in the provision of dedicated financial and non-financial services to SMEs in Ghana.

With offices located in Madina, Ashtown, and Kasoa, the UMB Centres for Businesses are equipped to offer free advisory services for greenhorn entrepreneurs, connecting local businesses and entrepreneurs to suppliers in other markets such as Asia and Europe, as well as business loans.

UMB, through the UMB PPP Incubator Centre, in 2018, provided a credit facility to the tune of US$10.7million to the Central Sugar Company Limited to produce starch in commercial quantities from cassava from their base at Prang in the Pru District of the Bono East Region; first-ever One District, One Factory project financed by a private financial institution.

Although the processing factory was constructed by the China National Building and Material Company (CNBM), a local steel company, Isopanel Company Limited was contracted to fabricate and install all the steel structures for the factory as part of efforts to promote active local content participation.

In Ghana, the food crops subsector is dominated by smallholder farmers whose planting practices are characterized by, inadequate use of technologies, low use of quality seeds and fertilizer as well as porous market linkages.

These issues collectively hinder growth in farm productivity. In response, the Government through the Ministry of Food and Agriculture (MoFA) initiated the first flagship module – Planting for Food and Jobs (PFJ) campaign in 2017.

The Planting for Food and Jobs initiative formed the basis of UMB’s relationship with Glofert Limited – a wholly Ghanaian company in the business of providing environmentally friendly, affordable, and quality fertilizers to farmers in Ghana and across Africa. UMB, in 2020, provided support of about $7.6m under the government's 1D1F policy to support the operations of Glofert Limited.

In a nation such as Ghana, where SMEs make up about 90% of registered businesses and provide 70% of employment to the teeming youth, it is understandable why a financial institution like UMB will consider the sprawling SME ecosystem in Ghana as the key driver for economic growth, prosperity, and a tincture for unemployment – and as such SMEs cannot be relegated to the fringes in any economic discourse. 

Commenting on the development, Charlotte Lily Baidoo, the General Manager for SME Banking at UMB noted that "SMEs are the drivers for economic growth in the country as they give employment to more than a 70percent of Ghanaians. As a Bank our DNA is SME.

"We were established in 1972, as a policy bank to grow Ghanaian SMEs to take over the commanding heights of the economy, and we have stayed true to this mandate. These findings reflect our commitment thereof. In 2022 we expect to consolidate this with more innovations, within the framework of government initiatives and market dynamics."

Meanwhile, the full Bank of Ghana report can be accessed on the Central Bank’s website.