Access to affordable finance remains one of the biggest barriers preventing Ghana's micro, small and medium-sized enterprises (MSMEs) from growing. Although MSMEs account for around 92 percent of businesses, provide nearly 80 percent of employment and contribute approximately 60 percent of the country's Gross Domestic Product (GDP), many entrepreneurs continue to struggle to access the capital they need to invest, expand and create jobs.
The challenge is particularly acute for women entrepreneurs and youth-led businesses, many of which remain underserved by traditional financial institutions due to limited collateral, high borrowing costs and a lack of formal financial records.
To help address these barriers, five market-ready digital finance solutions have been developed through the Joint SDG Fund programme Leveraging Digital Ecosystems for Increased MSME Productivity. The initiative is supporting financial institutions and fintech companies to design innovative financial products that expand access to credit while strengthening Ghana's digital financial ecosystem.
The solutions were unveiled during "Beyond the Blueprint: Putting Digital Finance to Work for MSMEs," convened by the United Nations Capital Development Fund (UNCDF), together with the United Nations Resident Coordinator's Office, the United Nations Development Programme (UNDP) and the United Nations Conference on Trade and Development (UNCTAD), in celebration of International MSMEs Day.
Strengthening the digital finance ecosystem
Rather than developing standalone financial products, the programme is helping build a stronger digital ecosystem where financial institutions, fintech companies, development partners and investors work together to deliver more inclusive financial services for underserved businesses.
Five financial institutions selected through a competitive process presented solutions that have now completed their design and validation phase.
Together, the five solutions respond to different financing challenges facing Ghana's MSMEs. Fido is developing a digital lending product tailored to small businesses. Adehyeman Savings and Loans, in partnership with Ghanaian fintech Oze, is introducing digital savings and loan products supported by alternative credit scoring to help rural entrepreneurs access finance. Mobile Money Limited is developing merchant payment services and digital bookkeeping tools that enable businesses to strengthen financial management and build the records needed to access credit. Solis Finance is building a digital savings and loans platform for informal enterprises, while Opportunity International is expanding microfinance products designed specifically for women- and youth-led businesses.
Collectively, these innovations address longstanding barriers to financial inclusion by improving access to credit, savings, financial management tools and business growth opportunities.
From innovation to implementation
With product development complete, the programme is now shifting its focus from innovation to implementation.
The two strongest-performing solutions will each receive up to US$200,000 in catalytic funding to pilot and scale their models. The investment will enable financial institutions to test their products in the market, generate evidence of both commercial and development impact, and attract additional investment to expand successful solutions.
The event also brought together donors, investors and development partners to explore opportunities to support the next phase of implementation, helping promising innovations move beyond pilot projects and reach more entrepreneurs across Ghana.
Catalysing inclusive growth
Expanding access to finance is about more than increasing the number of loans available to small businesses. It is about enabling entrepreneurs to invest, grow their businesses, create jobs and contribute more fully to Ghana's economic development.
By bringing together government, the UN system, financial institutions, fintech companies and investors, the Joint SDG Fund programme demonstrates how digital innovation, strategic partnerships and catalytic funding can help reshape financial markets to better serve women entrepreneurs and youth-led MSMEs.
Beyond the five solutions themselves, the initiative is helping build a more inclusive digital financial ecosystem, one that gives more businesses the tools, services and opportunities they need to grow and contribute to sustainable economic development.
Originally published by UNCDF.
Note:
All joint programmes of the Joint SDG Fund are led by UN Resident Coordinators and implemented by the agencies, funds, and programmes of the United Nations development system. With sincere appreciation for the contributions from the European Union and Governments of Belgium, Denmark, Germany, Ireland, Italy, Luxembourg, Monaco, the Netherlands, Norway, Poland, Portugal, the Republic of Korea, the Kingdom of Saudi Arabia, Spain, Sweden, Switzerland, and the Arab Gulf Programme for Development for a transformative movement towards achieving the SDGs by 2030.
