GHANA PRIVATE SECTOR DEVELOPMENT FACILITY (GPSDF)
Credit Facility for Small and Medium Enterprises
ACCESSING THE CREDIT FACILITY
The Ministry of Trade and Industry (MOTI)
The Embassy of Italy in Accra / The Italian Cooperation (MAE DGCS)
Following the successful implementation of the Project named “Ghana Private Sector
Development Fund”, financed by the Italian Government in 2003 for a total amount of
11,000,000 Euro, the Italian Ministry for Foreign Affairs (DGCS) approved in December 2007
additional financial resources of 22,000,000 Euro in order to continue to support the effort of
the Government of the Republic of Ghana to promote private sector development. The new
financial resources consist in two main components: a loan component of 20,000,000 Euro,
used to establish a credit facility in favour of Ghanaian private Small and Medium Enterprises
(SMEs), and a grant component of 2,000,000 Euro, which will cover the operational costs and
the technical assistance activities of the Project.
II. BENEFICIARIES OF THE CREDIT FACILITY
II.1 Eligibility Criteria
Beneficiaries of the Credit Facility shall be only Ghanaian Small and Medium Enterprises which
fulfil the following eligibility criteria:
The ownership of the enterprise must be 100% private;
The enterprise must be part of the production or of the service sector (i.e. farming
activities are not eligible);
The production activity of the enterprise must not harm the environment (i.e. wood
processing activities are not eligible);
The enterprise must not make use, directly or indirectly, of child labour;
The operation of the enterprise must not have any direct or indirect connection with
military activities or weapons (including sporting fire arms, defence systems, military
installations, military equipment and materials), tobacco processing and luxury goods;
On the other hand, start-up companies (companies registered but not yet into
operation) are also eligible, as long as they provide the relevant certificates of
II.2 Preferential Criteria
The following preferential criteria (related to the operational structure of the beneficiary SMEs)
will be taken into consideration:
High utilisation of women labour;
High labour utilisation;
Operation in the agro-industry or food industry sub-sectors;
Operation in the industrial sector;
Participation of or concrete synergies with Ghanaians residing in Italy;
Italian participation in the ownership of the enterprise;
Foreign participation in the ownership of the enterprise;
Activity oriented to the improvement of the environment conditions;
Activities in the Tourism sector.
In respect of loans approved for SMEs that are in compliance with one or more of the above
preferential criteria, on-lending, re-lending and leasing special conditions will be applied (cf.
UTILISATION OF THE CREDIT FACILITY
III.1 Eligibility Criteria for Contracts to be Financed
In order to be considered eligible for the Credit Facility, the supply contracts shall have the
The total aggregate value of the supply contracts, for which the financing is requested
by a single SME, must not be lower than EURO 25,000.00 equivalent and not higher than
EURO 550,000.00 equivalent.
Each supply contract may include capital goods, spare parts, consumable production
inputs and services thereto connected (like design, training, buildings erection, after sale
services, etc) and may include also construction works.
The total aggregate price of the contracts, for which a financing is requested by a single
SME, must be relevant to goods and services of Italian origin for a quota not lower than
70%. The remaining 30% of the total aggregate price of the contracts can be related to
the supply of goods and services (or construction works) of local origin (from Ghana or
neighbouring Countries) including not more than 5% of the total aggregate price of the
contracts for raw materials and/or semi-finished goods for manufacturing relevant to
the investment. The quota of 30% that is not tied to supplies of Italian origin can be part
of contracts established with Italian suppliers or can be related to contracts established
with suppliers or construction company from Ghana or from neighbouring countries.
The supply contracts must not include: (i) goods and services related, directly or
indirectly to military activities, (ii) luxurious items and, (iii) goods that are not in
conformity to the international rules on environmental protection and on workers’
III.2 Local Financial Intermediaries Eligible to provide Loans
The Local Financial Intermediaries to channel the Credit Facility to the beneficiary SMEs are all
the Ghanaian Commercial Banks and Leasing Companies that satisfy the laws and regulations
of the Republic of Ghana, provided that they sign a Framework On-lending Agreement with
the Bank of Ghana:
The Commercial Banks will act solely as intermediary of the Credit Facility by on-
lending the loans received by the Bank of Ghana to the SMEs;
The Leasing Companies will, as well, receive loans from the Bank of Ghana but they
will act also as contracting party with the Suppliers. Therefore the Leasing Companies
will have, for a certain period, the ownership of the purchased goods.
The local financial institutions which signed the Framework On-Lending Agreement and
consequently participated in the GPSDF between 2003 and 2008 are listed below:
Local Commercial Banks Local Private Leasing Companies
The Trust Bank Leasafric Ghana Ltd.
P.O. Box 1862 - Accra P.O. Box CT2430 - Accra
Tel. 021-222407 Tel. 021-251640/228373
Merchant Bank Ghana Ltd. Ghana Leasing Co. Ltd.
P.O. Box 401 - Accra P.O. Box 14295 - Accra
Tel. 021- 666331/5 Tel. 021-667218
Cal Merchant Bank Ghana Ltd. Merban Finance & Leasing Co.
P.O. Box 14596 - Accra P.O. Box 401 - Accra
Tel. 021-221087/221056 Tel. 021-66633/5
SG-SSB Horizon Finance and Leasing Company Ltd. (ex
P.O. Box 13119 - Accra General Leasing & Finance)
Tel. 021-228322/228334 P.O. Box CT 1967 - Accra
International Commercial Bank
PO Box 20957 - Accra
Tel. 021-666190 / 665779
First Atlantic Merchant Bank
PO Box CT 1620 - Accra
National Investment Bank Ltd.
P.O. Box 3726 - Accra
Amalgamated Bank Ltd.
P.O. Box 1541- Accra
United Bank of Africa
(ex Standard Trust Bank Ltd.)
P.O. Box 14596 - Accra
Ghana Commercial Bank
P.O. Box 134 – Accra
III.3 Characteristics of the Loans to the SMEs
In re-lending the loan received by the Bank of Ghana to an SME, the Financial Institution may
make use of its own format, provided that the re-lending conditions to the SME are not less
favourable than the following:
Interest rate to SME between 9 and 12% per year;
Repayment of principals in a period not less than 5 years and not exceeding 8 years
after the communication from the Bank of Ghana of the final allocation of the
contract/s to the Soft Loan. For leasing companies, the repayment period can last
between 2 and 7 years;
The repayment period for principals shall include a grace period which must be related
to the reasonably expected time necessary for the delivery of the goods to the
beneficiary SME and, where applicable, for the buildings erection and commissioning;
the grace period shall not exceed 2 years (for banks) or 1 year (for leasing companies).
Whenever the special conditions referred to in Par. II.2 apply, the interest rate indicated
above will be reduced by 1%.
A Facility Management Unit (FMU) has been established in order to facilitate the
implementation of the Project.
The beneficiary SMEs will have the responsibility for the identification and formulation of
sound proposals for investment suitable to be financed through the Credit Facility. During the
preparation of their proposals, the SMEs may request the advice of the FMU and its support
in the preparation of the business plan. Similarly, the Financial Institutions will have the full
responsibility for the evaluation of the requests for financing, but may request the advice of
the FMU for the appraisal of the proposals.
CONTACTS: N. 90 Sunyani Avenue, Box KDPMB 12, Kanda – Accra, Ghana
Tel. +233-21-230117/237352, Fax +233-21-235452, Email firstname.lastname@example.org
Annex I – Example of Business Plan contents
• Company background
• History, previous jobs and credit history
• Vision, mission and objectives/strategy
• Human resources (e.g. board of directors, management team and system, organigram,
shareholding structure etc)
• Current status: existing activities, assets and products (if you are starting up a company,
this paragraph would describe previous activities and experiences in related areas)
• Location and contact details
• Legal status and relevant company certificates (Certificate to Commence Business,
Certificate of Incorporation, Bank statements, audited financial statements etc.)
• Project description
• Financing required (project cost estimates and proposed financing details)
• Technical specifications of all equipment/products/services to be purchased, and
possible suppliers in Italy (and Ghana/neighbouring countries, if applicable)
• Marketing analysis (situational analysis, structure of the sub-sector, target market,
marketing objectives and strategies, competition analysis)
• Technical analysis (location, plant and machinery, other fixed assets, raw materials,
production process, expected outputs and products, demand/supply analysis)
• Risks analysis (political environment, market, financial risks)
• Socio-economical analysis (linkage effect, import substitution, employment generation,
poverty alleviation, capacity building, taxes etc.) and general efficiency of the project
• Financial analysis (break-even analysis, projected cash flow tables, loan repayment
schedule, internal financial rate of return analysis, sensitivity analysis, depreciation,
maintenance and amortization schedule)
• SWOT (Strengths, Weaknesses, Opportunities and Threats of the project)
Annex II – Frequently Asked Questions
Q. What are the minimum and maximum amounts for the loan?
A. Between 25,000 and 550,000 Euro.
Q. What is the best interest rate I could obtain?
A. The interest rate, to be negotiated with the banks, will be between 9% and 12%. A reduction
of 1% could be applied if you meet the preferential criteria listed in the guidelines.
Q. What are the repayment periods?
A. Between 5 and 8 years for the banks, and between 2 and 7 years for the leasing companies.
Q. Can I expect a grace period?
A. Yes, the grace period is related to the delivery/installation of the goods, and should not
exceed 2 years (for the banks) and 1 year (for the leasing companies).
Q. Do I have to purchase equipment and materials from Italy?
A. Yes, at least 70% of the loan amount should be used to purchase equipment from Italy. The
remaining 30% can be used to purchase equipment and services from Ghana or neighbouring
Q. How can I find suppliers in Italy?
A. On the basis of the technical specifications described in your business plan, we will assist you
in finding the proper suppliers.
Q. Will you charge me to find the suppliers or to revise my business plan?
A. No, there are no charges involved.
Q. Can I obtain a loan for farming activities?
A. No, there must be some kind of processing activity (for example, production of fruit juices,
Q. Can I obtain a loan for trading activities (shop, general commerce, import-export etc.)?
A. No, there must be some kind of productive activity.
Q. Can I obtain a loan for a proposal related to the service sector?
Yes: in fact, the tourism industry is now considered a preferential sector.
Q. Can I purchase raw materials?
A. Yes, up to 5% of the total loan amount can be used to purchase raw materials.
Q. Can I use the loan for constructions works?
A. Yes, up to 30% of the loan request can be used for constructions works.
Q. Do I need collaterals to obtain the loan?
A. While not required by the eligibility criteria, the financial institutions are unlikely to process
the loan if no collaterals are offered. Leasing companies might accept to use the purchased
equipment as collateral.
Q. Do I have to inject internal equity into the project proposal?
A. While not required by the eligibility criteria, it is indeed recommended.
Q. Does your approval mean that our company will receive the loan?
A. No, our approval means that you are eligible to receive the loan at the favourable conditions
described above: however, your application will then be submitted to the local financial
institutions for examination, in order to discuss the needed collaterals, the exact interest rate
and the repayment/grace periods.
Q. Will you come to visit my facilities?
A. Yes, we will inspect your facilities once your application is deemed eligible.
Q. My bank is not listed in your list of financial institutions; can it participate in the GPSDF
A. Yes, all banks and leasing companies in Ghana are welcome to participate in the GPSDF
project, as long as they sign the relevant Framework On-Lending agreement with the Bank of
Q. I have read your guidelines and prepared a business plan. What should I do now?
A. Please fill the application form in Annex 3 and submit it, along with your business plan, in
one of the following way:
1. By email (preferred, as we will need a digital copy of your business plan): email@example.com
2. By mail or by person, at: N. 90 Sunyani Avenue, Box KDPMB 12, Kanda – Accra, Ghana.
Annex III – Application Form (Project Card)
Contact Name and Position:
Mailing Address (please also specify
site location, if different than mailing
Telephone and Fax:
Year of Establishment : weaponry,
Current Sector (e.g. Agro-processing, processing
Mining etc.): and
Description of current business
B. COMPANY PROFILE
Share Capital (Cedis):
Turnover in the past Year (Cedis): Not
Number of Employees: Male: Female: Total: Startup
Italian participation in ownership (Yes/No):
Foreign participation in ownership (Yes/No):
C. LEGAL CERTIFICATES
Must match with
Business Certificate (Certificate to Commence N. Date: Company main
Business / Business Registration Certificate) sector (Par. A) and
Other relevant licenses to carry on trade (e.g. N. Date:
Registration Food And Drug Board, Ghana Standard
Fill as applicable
Board certificate, Environmental Permit, Type:
according to the
Incorporation under Companies Code 1963 [Act Company main
179], Land Certificates etc.) Sector (Par. A)
Type: Sector (Par. D)
D. PROJECT DETAILS
Objective of the Project (Project
Sector and description of planned processing and
(1) Equipment/Goods to be Description : activities
purchased in Italy ( from Italian
Must be at least
Manufacturers) 70% of loan
Cost Estimate (Cedis):
(2) [If applicable] Equipment/Goods Description :
Maximum of 5%
/Services to be purchased in Ghana
for raw materials
or neighbouring countries on loan request
(including construction works)
Cost Estimate (Cedis):
Must be between
(3) =(1)+(2) Requested amount for 25,000 -550,000
Euro (according to
GPSDF credit facility (Cedis):
(4) Additional internal Equity
injected into the project (Cedis): We recommend a
(5) = (3)+(4) Total Investment Cost debt/equity ratio
(according to your
Signature (or Contact Name): ____________________ Date: _________________
NB: Please submit the duly completed application form, along with your business plan in digital format (in MS
Word or Excel) and a copy of all the certificates listed in table C, in one of the following ways:
1. By email (preferred): firstname.lastname@example.org
2. By conventional mail or in person, at: GPSDF - N. 90 Sunyani Avenue, Box KDPMB 12, Kanda – Accra, Ghana.