DBG to engage banking sector in addressing challenges post DDEP

Development Bank Ghana (DBG) has revealed its plans to engage with policymakers, regulators and industry stakeholders to address challenges posed by the current macroeconomic environment and the Domestic Debt Exchange Programme (DDEP).

The challenging operating environment in 2022 has reflected in the banking sector, driven by macroeconomic conditions and implementation of the Domestic Debt Exchange Programme which saw significant losses on account of impairing banks’ holdings in GoG bonds. As a result, profitability levels in the banking sector have declined – with mark-to-market losses on investments, higher impairments on loans, and rising operating costs.

The Chief Executive Officer (CEO) of DBG, Kwamina Duker, stated that the bank will work toward strengthening the industry’s resilience, ensuring adequate capitalisation, and implementing targetted policies to mitigate risks while promoting a conducive environment for economic growth and financial stability.

“We will actively engage with policymakers, regulators and industry stakeholders to address challenges posed by the current macroeconomic environment and the Domestic Debt Exchange Programme. Together, we will work toward strengthening the industry’s resilience, ensuring adequate capitalisation, and implementing targetted policies to mitigate risks.

“Our focus is on promoting a conducive environment for economic growth and financial stability,” DBG’s CEO said while disclosing this milestone achievement as part of the bank’s role in working with the banking sector to resuscitate the country’s economy.

Mr. Duker highlighted that the bank aims to continue supporting the growth and development of small and medium-sized enterprises (SMEs), fostering job creation, and promoting inclusive and sustainable development in Ghana. To achieve this, the bank plans to expand its network of participating financial institutions (PFIs) by identifying and onboarding new PFIs to enhance its reach and ability to support SMEs across the country. The bank seeks to have at least ten PFIs by end of the year.

Currently, DBG has onboarded Zenith Bank as the latest PFI – expanding its network of partners and enhancing its ability to reach more SMEs across various sectors. The bank has also completed due diligence and is on course to onboard Ecobank and Absa as new PFIs this month.

In the first quarter of the year, DBG increased its lending portfolio by disbursing GH₵57.2million to three PFIs for onward lending to businesses in the Agriculture and Manufacturing sectors, bringing its loan book size to GH₵302million.

The bank also provided capacity building to 644 local businesses; including 444 young entrepreneurs and 52 staff from 13 financial institutions during the quarter. This training focused on various aspects of business management, entrepreneurship and specialised lending to improve the sustainability and growth potential of SMEs, as well as enhance the lending capabilities of PFIs.

“We are committed to forging strategic partnerships and collaborations with both local and international stakeholders to drive forward our mission of promoting inclusive and sustainable development in Ghana. By leveraging our combined expertise and resources, we can overcome the obstacles ahead and unlock the immense potential of Ghanaian businesses,” Mr. Duker said.

DBG remains optimistic about the future and confident in its ability to navigate the challenges ahead. By focusing on its priorities, the bank aims to continue supporting SMEs in Ghana, fostering job creation while promoting inclusive and sustainable development in the country.