British International Investment (BII), the UK’s development finance institution (DFI) and impact investor, has unveiled a groundbreaking investment platform to foster economic growth, and support small and medium-sized enterprises (SMEs) to bolster funding opportunities for local businesses in Ghana.
The platform, named “Growth Investment Partners (GIP)”, was launched during a media parley yesterday at the Movenpick Ambassador Hotel in Accra. The event was rolled out alongside the BII’s 75th Anniversary as well as its 64 years of investing in Ghana.
The Managing Director and Head of Africa of BII, Chris Chijiutomi, said the GIP Ghana is a first-of-itskind company that will provide patient, flexible local currency financing to SMEs. He stressed that it is supported with an anchor capital commitment of up to US$50 million from BII.
Chris Chijiutomi stated that the GIP aims to establish itself as a new alternative investment option for long-term capital from local institutional investors in Ghana. He added that GIP will help to address a critical gap in accessing finance for SMES who are the lifeblood of the Ghanaian economy.
He said: “BII has been a strategic partner to Ghanaian businesses for 64 years. We are thrilled to bring GIP, a unique and first-of-its-kind platform, to Ghana and we are confident that it will become a valuable and long-term partner to the country’s SMEs. Our ambition is to scale GIP across other countries in the continent where there is a need to provide long-term flexible growth capital to African SMEs”.
The GIP MD further acknowledged that SMEs occupy a critical role in the Ghanaian economy, accounting for over 90 per cent of business enterprises, 60 per cent of the country’s GDP and 80 per cent of all employment.
However, he said, despite their importance to the Ghanaian economy, the SME financing gap is estimated at US$4.8 billion, one of the largest in Africa.
He lamented that SMEs face many challenges with accessing growth capital through traditional funding sources, including high interest rates, short-term loans, high collateral requirements and currency mismatches.
Chris Chijiutomi further indicated that GIP is designed for investments from local institutional investors, expanding the capital market in Ghana and scaling GIP’s impact.
He pointed out that GIP will provide capital to SMEs of US$500k – US$5m, equivalent in local currency, through flexible financing options that meet the needs of local businesses and are otherwise not available in the market.
Chijiutomi mentioned that his outfit will support up to 150 Ghanaian SMEs within the next 15 years. He revealed that the company, complemented by BII’s new technical assistance facility, Ghana Investment Support Programme, will also look to add value beyond capital by providing business support services and capacity building in areas of financial management, corporate governance and environmental and social practices, enabling the SME sector to grow in a productive, sustainable and inclusive way.
For his part, the Chief Executive and Investment Officer of GIP Ghana, Jacob Kholi, emphasised that enabling financial inclusion for Ghanaian SMEs is critical to drive economic growth across the country.
“We believe GIP will be transformative in responding to Ghanaian SMEs’ financing needs, and we look forward to supporting their ambitions to expand, innovate, and drive a sustainable, inclusive economic growth that benefits people in Ghana,” he stated.
Mr Kholi outlined that the qualifying criteria for funding from GIP Ghana, should be a business with turnover and assets up to the cedi equivalent of $15miilion.
“Still any company meeting any two qualifies for GIP funding because the businesses must be incorporated in Ghana and their main operations must be in Ghana and at least 50% of their revenues must be generated from its operations in Ghana,” he added.
The Chairman of the GIP Ghana, Albert Essien, stressed that SMEs are the backbone of Ghana’s economy, providing employment opportunities, contributing to GDP growth, and driving innovation across various sectors. He reaffirmed GIP Ghana’s commitment to empowering these enterprises through strategic investments.
Kwabena Asante-Poku, Coverage Director for Ghana, BII, noted: “We are excited to support the growth ambitions of investment-ready SMEs in Ghana. The launch of GIP in Accra is a testament both to our long-term commitment to the country and our conviction that supporting talented Ghanaian entrepreneurs is the most effective way to deliver transformative impact at scale”.