Development Bank, AGI sign MoU to bolster garments and textile industry

The Development Bank of Ghana (DBG) has signed a memorandum of understanding (MoU) with the Association of Ghana Industries (AGI) to promote the growth of the garments and textile industry in the country.

Under the agreement, the DBG will commit at least GH¢100 million annually to provide long-term financing and also support capacity-building for selected small and medium enterprises over the next three years on a pilot basis.

This is expected to empower the beneficiary SMEs to overcome challenges undermining their capacity and also enhance the country’s competitiveness in global and regional markets. 

The Chief Executive Officer of DBG, Kwamina Duker, signed on behalf of the bank while the President of the AGI, Dr Humphrey Kwesi Ayim Darke, penned down his signature on behalf of the association.

Significance

Mr Duker described the partnership agreement as a significant milestone, saying it reinforced the bank’s commitment to impact growth, by catalysing economic transformation and fostering a competitive private sector.

He said over the past three years, the bank had demonstrated such commitment, leading disbursement of GH¢1.58 billion to SMEs across 13 regions in the country, comprised of 500 direct MSMEs beneficiaries, 5,000 indirect beneficiaries and creating and sustaining over 17,000 jobs.

The CEO said 16 partnering national institutions would be working with the bank “in a trusted relationship” to be able to deliver their mandate.

“We have about GH¢360.9 million for the manufacturing sector, agriculture GH¢308 million, ICT investment of GH¢26.6 million, and high-value services about GH¢684.7 million.

“We have also committed to the SDGs by ensuring that 51 per cent of DBG loans are disbursed to women-led or owned businesses, while 334 women-led businesses have received direct funding amounting to GH¢806 million,” he added.

Tailored financing

Mr Duker added that 5,815 female entrepreneurs had been financed directly and indirectly through off-taker pre-financing arrangements.

“So, today’s MoU is just the next stage of targeted interventions and in this respect, we want to be very intentional,” he said.

Mr Duker explained that the agreement was part of the bank’s SME goal initiative that began in July, this year, by the Minister of Finance to revitalise the country’s textile and garment industry.

“We will ensure that businesses receive the financial support and guidance needed to succeed and this will enhance competitiveness and innovation.

“We seek to close the GH¢5 billion MSME financing gap and scale up support for women-led enterprises to GH¢1 billion by the end of next year,” he said.

Appreciation 

Dr Darke described the DBG’s support for the garments and textile industry as purposeful and intentional.

He praised the bank for demonstrating courage to tackle the joblessness in the economy and for seeking to correct the curve with the partnership and promote an enterprising economy where competition and associated factors would be the hallmark of engagement.

“Historically, one could attest to the fact that developed economies once had such courageous interventions that supported the private sector to turn around and we welcome this opportunity wholeheartedly,” Dr Darke said.

He called on members who would benefit from such interventions to adhere to the “terms and the fidelity” of the engagement to support the cause of creating jobs and an enterprising economy.