Since it first began operations in Ghana 12 years ago, ProCredit Savings and Loans Company has now positioned itself to become an important player in SME finance.
Founded by ProCredit Holding, based in Frankfurt Germany, ProCredit came to Ghana with a socio-economic development focus.
From the beginning, the bank was only interested in supporting the economy in Ghana as it was in boosting its bottom line.
Starting with zero accounts and a microcredit approach, the bank rose to become the premier micro lending institution in Ghana.
By 2009, there were dozens of new players starting to flood the market.
With so many other firms providing the same services, ProCredit felt the need to make a better impact elsewhere leading to its new goal— to transition out of micro lending and become the premier financial partner for SMEs in Ghana.
Development- focused SME partner
According to the Managing Director of ProCredit, Ms Sarah Zetterli of the bank, “SMEs are VIPs for us.”
ProCredit, a Savings and Loans Company, offers loans of amounts up to over 4 million Ghana Cedis, although loans generally are between 10,000 and 500,000 Ghana Cedis.
They have an outstanding loan portfolio of 85 million Ghana Cedis, fully funded by locally mobilized deposits. But ProCredit does not focus on profit maximisation instead they place more emphasis on long term relationship building with their clients.
“We really try to partner with our clients. Many of our clients are surprised at how much we will help them. In some cases, we will even help them prepare their financial statements, plan their next investment, and tighten their management practices,” Zetterli says.
Building a relationship is important to Clients businesses for several reasons. It increases clients understanding of their own business, improves clients’ management and organisational structure and risk management systems.
These go a long way to enhance clients’ business profitability.
In some cases, they use innovative approaches to live this philosophy, like with the agricultural services they opened in 2007.
“Instead of training bankers to understand agriculture, we decided to train agricultural sector graduates and extension officers to be bankers,” says Zetterli.
They travel to their clients’ farms, instead of asking their agricultural clients to come to them. Today, more than 10% of the loan portfolio is extended to agricultural clients in sectors such as cocoa, oil palm, and poultry.
Because of the close relationship ProCredit builds with each customer, they are able to offer services like credit lines, where a client has a line of credit waiting on standby that they can access as needed up to a predefined limit.
They also offer hybrid savings accounts, which allow clients easy access to their funds while still earning interest. These kinds of services can be very important, especially to entrepreneurs.
As part of its development focus, ProCredit puts heavy emphasis on environmental initiatives, both with their clients and in their internal operations. An example is their recycling program.
ProCredit realized they were generating a lot of paper waste from shredded documents, so they decided to start selling the waste to a company near Akosombo that makes toilet paper, and now their procurement unit buys back the toilet paper for use at ProCredit.
Investing for the future
ProCredit has some exciting initiatives coming up for their Ghanaian clients.
Their new building at Tesano will be six stories, powered in-part by a full rooftop installation of solar panels.
Zetterli told us, “We aim to be the first net zero-emissions office building in Ghana. Thanks to the new Renewable Energies Act, out solar panels will produce enough energy to feed back into the grid that we will be able to replace what we’ve used during the week.”
ProCredit also plans to expand its electronic banking services. Having been the first Savings and Loans Company in Ghana to introduce ATMs, they will soon offer VISA card and Gh-Link capabilities on their ATMs, so that their clients can access funds easily across the country and around the world.
They already offer SMS banking which allows clients to easily make transactions from their mobile phone using a secure token.
ProCredit and the Ghanaian economy
The depreciating cedi is a matter of concern for ProCredit’s clients and investors. ProCredit plans to contribute its part by offering favourable conditions to clients involved with manufacturing and agro-processing.
In its small way, ProCredit hopes to contribute to the industrial base of the economy, ultimately helping to address some of Ghana’s issues with macroeconomic fundamentals.