The Ministry of Finance has launched the Ghana CARES Guarantee Scheme to facilitate access to financing by business sectors that have been affected by the Covid-19 pandemic.

The Guarantee Scheme which aims to improve businesses will be implemented through the issuance of guarantee cover to participating financial institutions.

Speaking at the launch, First Deputy Governor of the Bank of Ghana, Dr. Maxwell Opoku-Afari said the scheme will help reduce the cost of borrowing of SMEs and increase their access to appropriate financing.

This, he says, “in turn should enable them to produce more to meet both local demand and to provide decent livelihoods to households that depend on them.”

Mr. Opoku-Afari further outlined a special feature of the scheme.

According to him, “a unique feature of the Ghana CARES programme is that it is being done through the provision of guarantees rather than cash handouts and is less distortionary to both the financial system and beneficiaries own sustainability going forward.”

The Minister of Planning, Prof. George Yaw Gyan-Baffour who represented the Minister of Finance, Ken Ofori Atta also stated that the scheme will guarantee 80 per cent of credit extended by participating banks to their clients.

“Through this scheme, we are incentivizing banks to lend to private sector at competitive rates. This is a GHS2 billion Initiative to be administered by GIRSAL to help SMEs borrow from banks at more affordable rates with longer tenor.”

“The Scheme will guarantee up to 80 percent of credit extended by participating banks to their clients. Under this initiative, we are targeting specific industries with agri-business, manufacturing, hospitality and tourism and the tech sector amongst others,” he said.

The Finance Minister in his mid-year budget review and supplementary estimates announced the establishment of a Guarantee Scheme of up to GHc2 billion to enable businesses to borrow from banks, at a more affordable rate and a longer course.