Micro, Small, and Medium Enterprises (MSMEs) in Ghana are to benefit from a partnership that will unlock their full potential and pave the way for innovation and job creation to build a brighter future. The partnership between the African Guarantee Fund and the Zenith Bank will focus on strategically important sectors like agriculture, manufacturing, trade, and education aligning with Ghana's development goals and maximizing economic impact. Mr. Henry Onwuzurigbo, MD/CEO of Zenith Bank (Ghana), speaking at the signing event, said it was not just a celebration of a partnership but to mark a pivotal moment in their collective journey towards empowering the true heroes of the economy. The partnership agreement aimed at providing access to finance to empower MSMEs in the country. While estimates vary, there is evidence that highlights the enormous contributions of MSMEs to job creation, income generation, trade, and inclusive growth and they form the bedrock of the economy. The World Bank indicates that MSM Es represent about 90 per cent of businesses and more than 50 per cent of employment worldwide. He said formal SMEs contribute up to 40 per cent of national income in emerging economies and these numbers were significantly higher when informal SMEs were included. The CEO/MD said in Ghana, MSMEs were crucial drivers of the economy, employing over 80 per cent of the workforce and contributing to more than 70 per cent of the private sector output, surpassing global averages. 'The domestic MSME sector, consisting of 2.1 million businesses, predominantly comprises 1.7 million micro-enterprises, creating 1-2 jobs each,' he added. He said Small enterprises, numbering 320,000, generate approximately six jobs per enterprise, while medium enterprises, though fewer at 85,000, contribute significantly with an average of around 46 jobs each. 'These statistics underscore the vital role of MSMEs in fostering employment and sustainable economic development in Ghana,' he said. He said that despite their undeniable impor tance, MSMEs face significant challenges, chief among them being access to finance, which has resulted in a huge financing gap. He said several reasons have been proffered for this financing gap, financial services providers readily attribute their risk aversion stance for not lending to MSMEs to demand-side constraints, such as the lack of managerial capacity, inadequate collateral, poor record keeping and many others. He said the road to success was with collaboration beyond Individual efforts and that was why 'we are incredibly excited to announce our partnership with the AGF.' He said with extensive experience and vast financial resources, AGF was a strong shoulder for them to lean on in their quest to empower MSMEs. Mr Onwuzurigbo said the partnership was a powerful force multiplier and through it, 'we unlock a multitude of benefits for MSMEs risk sharing with the Fund, through which we can offer loans to businesses that previously struggled to meet collateral requirements.' He said through AGF's Af firmative Finance Action for Women in Africa programme, they would offer discounted rates and increased guarantee cover for women-owned businesses. Mr Onwuzurigbo said recognizing the importance of sustainability, they would provide special incentives for environmentally friendly enterprises, promoting responsible growth and a healthier planet. Mr Bendjin Kpeglo, Director General, AGF West Africa, said the agreement was a testament to a shared responsibility of supporting SME development in Ghana. He said as part of the support, they would provide increased access to funding and technical assistance to these SMEs and the Bank itself, while boosting the economy of the country. He said women-led businesses would be given some discounted rates and increased guarantees. The partnership will provide financing support for 100 MSMEs at the initial start but will be scaled up to 300 based on their performance and review. Mr Sampson Akligoh, Director, Financial Sector Division, Ministry of Finance, commended the two institutions for supporting the MSMEs sector to grow. He said the government would continue to support MSMEs and women-led businesses to contribute to the growth and development of the economy. Mr Ismail Adam, Deputy Director, Banking Supervision Department at the Bank of Ghana, expressed the hope that the initiative would serve as a catalyst that would birth more strategic partnerships between AGF and the Banking sector to support more SME lending to help build inclusive, sustainable, and resilient economy. He urged the parties to ensure that a lot more SMEs benefit from the initiative and 'l expect that even lower interest rates will be offered to SMEs in time.' Source: Ghana News Agency