Societe Generale Ghana (SG Ghana) on Thursday signed a 10-million dollar credit facility with PROPARCO, a French Development Finance Institution, to enable it to support its clients’ growth with long-term resources.
The seven-year loan agreement would be used by SG Ghana, formerly SG-SSB, to lend to Corporate, Small and Medium Enterprises (SMEs) for financing capital expenditures in various sectors of the Ghanaian economy.
Mr Claude Periou, Chief Executive Officer of PROPARCO and Mr Gilbert Hie, Managing Director of SG Ghana, signed the agreement for their respective institutions.
PROPARCO is jointly owned by Agence Francaise de Developpment (AFD) and public and private shareholders.
Mr Hie said in recent years, the growth of the Ghanaian Economy had increased the demand for long-term funding for Capital Expenditure (CAPEX) investments and that the infrastructure funding and facility would allow the Bank to meet the growing needs in the long term resources in foreign currency for its clients.
He said the Bank would be careful in giving out the credit facility to only companies which have the capacity to re-pay in foreign currency.
Recounting the business relationship between the bank and PROPARCO, Mr Hie said for the past four years, the Bank had a very strong partnership with PROPARCO and AFD in Ghana and several credit facilities had been granted to the Bank in Ghana as well as in many other countries in Africa for decades.
“It is our strong commitment to partner the Ghanaian businesses in the socio economic development of this country and to provide the requisite funding for Retail, Corporate and SME sectors of Ghana,” he said.
Mr Periou said in the last 10 years, Ghana had made substantial progress in developing and improving the stability of its banking system.
He said new regulations and guidelines had notably made the sector more efficient, innovative and profitable and the recent round of successful capital increases had further strengthened Ghanaian banks.
Mr Periou said with an improved business environment and a dynamic private sector and the need for long term financing could not be over emphasized.
“The banking sector in Ghana is showing good fundamentals and encouraging prospects. PROPARCO is very happy to renew its operation with SG Ghana,” he said.
He expressed the hope that the credit facility would increase the availability of long-term financial resources in the country and also enhance the financial depth of the banking sector.
Mr Periou said the facility was PROPARCO’s commitment to the Ghanaian banking sector to foster long term investments in the country and support the development of SMEs, which are sources of employment and levers of growth.
Mr Frederic Clavier, French Ambassador to Ghana, said the agreement was as a result of the recent visit by President John Dramani Mahama to France and it was a new proof of France’s commitment to help the growth of the Ghanaian economy.
He said he was glad to witness the agreement between SG Ghana and PROPARCO to address the long-term financial needs of the Ghanaian companies and commended the Bank for its strong involvement in the financing of corporate and SMEs.
“…with such a partnership between a local bank and a development institution, I am now fully confident in helping to provide solutions for this nagging issue of lack of credit in this country,” he added.
PROPARCO is a subsidiary of the AFD dedicated to the financing of the private sector, offering a wide range of long-term financial instrument in the form of loans, equity investments and guarantees, and has been operating in Western Africa since its creation in 1977.