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Pilot events presenting adapted financial products to MSMEs The over 160,000 MSMEs in Ghana often lack access to adequate financing. Supporting financial service providers (FSPs) in developing needs-based and suitable products for MSMEs is therefore an important step to promote the country’s economy. The Deutsche Gesellschaft für Internationale Zusammenarbeit’s (GIZ) Financial Sector Development project “Improving Access to Financial Services”—implemented by the consortium partners AFC Agriculture and Finance Consultants, CDC Consult and GOPA Worldwide Consultants— takes up that challenge. Thanks to the project team’s good and strong cooperation with the partner FSPs, the AFC team designed six new savings and loans products, including group and individual loans. These models were discussed with selected members of partner sector associations in focus group meetings, to obtain feedback and to finalise them. Our AFC experts are currently piloting two of these new savings and loan products, developed jointly with Access Bank Ghana and Letshego Savings and Loans. During these pilot events, the products’ main features and benefits are presented at member meetings of the Ghana National Associations of Garages and of Tailors and Dressmakers. This is possible thanks to the productive collaboration that was established between the FSPs and the associations. Their high-level engagement in fruitful meetings enabled the shaping and formulation of product conditions like the loan amount, tenure, interest rates, processing fees, and collateral requirements. These consultations aim to make the products more attractive to MSMEs and this way to increase the number of the FSPs’ customers. Each pilot event is attended by at least 70 and on occasions up to 100 participants. The partaking MSMEs are critical about the product features and ask various questions, for example on loan conditions, as many made unpleasant experiences with banks in the past. The feedback will be used to further improve the products. In consequence, up to now, over 300 accounts were opened during the events. Most of the account holders will apply for the
savings product and after three months also for the lending product. The general perception of the pilot event is very good. The president of the National Tailors and Dressmakers Association, for example, was very impressed by the responsiveness of Letshego Savings and Loans. The MSMEs on the other hand seemingly enjoy the events, are highly interested in opening accounts and appreciate the new financial products. For example, the possibility of conducting transactions from the comfort of their homes by using Letshego digital mall, an app that does not charge any fees, or that they do not need to provide any collateral before assessing the product, as their membership in the association serves as guarantee. Francis Tetteh, Secretary at the National Association of Garages, says after the event: “We [the National Association of Garages] will continue to mobilize our members for this supportive program. Attendance so far is so good, very encouraging. My joy is that other zones are also calling for their turn when they saw the pictures from those visited, which to me is good news. Thanks to you and your team GIZ and Access bank.” In the coming week, we will start piloting with the third bank, Sinapi Aba, in Kumasi, and the Fashion Designers Association. By the end of March, our developed products will have been piloted at nine events, bringing us again a step further in increasing the access to finance for MSMEs. For further information please contact: cynthia.odonkor@giz.de