Ghana Development Bank

Using The Cedi Bond Proceeds /Credits

 

 

 

Financing the SME’s

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To foster growth and create jobs, the GhDB will sign agreement with key Commercial Banks  the and financial institutions in the country to boost access to affordable credit for Small and Medium enterprises. This will ease financing for companies with solid business models and good growth prospects and help them to expand production, create jobs and apprenticeships for young people. 

 

Under the agreement, these banks could access the financial facility at GhDB at an interest of about 2.5% and will be able to lend to the qualified SME’s at a rate between 2.5 and 4% per annum. 

 

 

 

​Agriculture 

 

The GhDB could partner with the nation’s Agric Development Bank (ADB) to design a special Agriculture Loan Facility through which low interest loans could be made available to farmers. The GhDB could assign let say Gh¢ 2 billion loan to the Agric Development Bank at an interest rate of about 2.5% with terms and condition that the ADB could loan this to various categories of farmers at an interest rate between 2.5-4% and not more than 4%.  

 

Farmers having access to loans under 4% together with technical support from well trained and well paid extension officers, could produce better products for both national and export market. 

 

 

 

​Housing.

 

The GhDB working through qualified Commercial Banks and other key institutions could introduce a Special low interest Housing Loan Facility (HLF) which will be accessible to Ghana Real Estate Developers Association (GREDA) members and other players in the real estate industry.

First GhDB through this Housing Loan Facility (HLF) will make available a loan of about Gh¢ 5 billion to these banks at interest rate of 2.5%. The commercial bank will then loan this to the Real Estate players (from manufactures to builders and mortgage companies) at a rate between 2.5-4% per annum for the construction of hundreds of thousands of family homes across the country.

 

 

 

Mortgages.

 

They GhDB  will then lend credit to mortgage institutions at a special low interest rate (say under 3% per annum) which in turn will allow those mortgage institutions to offer mortgage loans to working families at a reasonable interest rate under 5%.

This will make mortgage homes available in every district of the country at a reasonable price and a low interest rate to give every working family the fair chance to own their own home and help pay back the loan through their mortgage repayment.

 

 

 

Building Industrial Estates

 

The GhDB having access to this huge financing could commission the development of major industrial estate to serve key sectors of the economy:

 

Example:

The Kumasi Suame Magazine Industrial Development Organisation (SMIDO) is searching for funds to purchase about 100 acre lands to develop a modern industrial site for spare parts dealers and artisans.

The GhDB could design a special loan facility to finance this project by purchasing and developing the said land into a modern industrial site with facilities such as:

 

• Road network, footpath with better address and direction systems.

• Store and warehouse facilities for spare parts dealers.

• Workshop facilities for the artisans.

• Office spaces for banks, insurance companies, mortgage institutions, restaurants, etc.

• Health and fitness centres.

• Hospital, ambulance centre and fire station.

• Toilet facilities.

• Administrative office to manage the entire industrial estate.

 

Establishing such a facility would cost a huge amount of Ghana Cedis but proceeds from mortgaging and renting these spaces will pay for both the loan together with the interest over the next ten to twenty years.

 

 

 

Caution !!!

 

Proceeds or Credit from The Cedi Bond is not government money and neither the presidency nor the finance ministry will have direct access to it.

 

Proceeds will not be used to finance government deficits and will not be used to buy cars for government departments and officials or be used by government to pay workers’ salaries or arrears or increases, but it will be used by the GhDB to provide medium to long term loans to finance productive fixed asset investment in all sectors of the Ghanaian economy and contributes to the development of the capital markets to aids the flow of local and international capital to businesses for the production of  goods and services that can be sold to raised back the money used in producing the very goods and services.

 

Government ministries will be forbidding from accessing funds directly from the GhDB.

 

Commercial banks and other financial institution that access cheap loans from GhDB will to be allowed to divert the cheap loans in buying of bonds but will be suppervise to make sure the loans recieved are use for the very purpose they were granted for.