A set of companies in Ghana have expressed interest in accessing a cheaper source of financing for sourcing goods and equipment from Germany, barely a week after its launch in Accra.
Lenz Finance Management of Germany, on Wednesday, announced that it could offer a minimum of €100,000 t0 €10 million at interest rates of up to 10 per cent a year to companies in Ghana that wanted source goods or equipment and machinery from Germany.
Lenz Finance is insured against default and the company will also look for sources of supply and suppliers credit for the local companies. The credit has a period of grace of six months before repayment starts.
Less than a week after the announcement, the Delegation of German Industries and Commerce in Ghana (AHK), one of the entities designated to receive applications in Ghana on behalf of Lenz Finance, has received several requests from companies in Ghana.
The Delegate of the German Industries and Commerce in Ghana, Mr Patrick Martens, told the Daily Graphic, that AHK was already processing the first application for onward transmission to LFM in Germany.
Interested companies are required to provide vital information as requested by all financial institutions such as certificate of incorporation, commencement of business and the type of business engaged in; financial statements of three years, audited to international standards; company profiles and ratios meant to assess the health of the company.
AHK Ghana has designated an officer, Mrs Helen Djan, to be in charge of processing applications from the country to be submitted to the financial partner to conduct credit eligibility on the customer companies before arriving at a decision to offer the product.
Mr Martens noted that AHK had the mandate to promote bilateral trade between Ghana and Germany and Lenz Finance was an appropriate partner in helping them to achieve their mandate.
“Trade volumes between the two countries have not reached our expectation as challenges in access and cost of finance remain. At AHK, we are not bankers, but we have the network that we leverage,” Mr Martens explained.
The Chief Executive Officer of Lenz Finance Management, Mr Wolfgang Lenz, explained that credit eligibility would be determined based on vital details of the company, including certificate of incorporation, three years financial statements of the company audited to international standards and financial ratios.
“We will subject the customers to all the requirements of the local bank, but the difference here is that the total finance cost is significantly cheaper and we find supply sources for companies that need them,” Mr Lenz explained.
LFM, which has been operating in the country on pilot basis for close to seven years, has a standing portfolio of about 15 million euros in financing capital goods and inputs in Ghana alone.
Mr Lenz said the company decided to expand its operations in Ghana due to the country’s position as a front-runner in Africa’s development and contribution to world productivity for the next decade.
“Ghana is appreciated by the international business community as a conducive place to do business, in addition to the peace and stability. But the cost of credit continues to be a constraint to business expansion and that is where we come in to close the gap,” the CEO of LFM said.