Background Of The Project

The Government of Ghana recognizes the importance of developing and implementing policies and programmes that seek to enhance the competitiveness of Ghanaian Micro, Small, and Medium Enterprises (MSMEs) in both local and external markets. It is against this backdrop that the current Administration has developed MSME and Entrepreneurship Policy, the first of its kind in the history of this country to provide a framework for activities within the MSME ecosystem. Other initiatives within the same sector include the Business Regulatory Reforms (BRR) currently under implementation and the Mastercard Programme that seeks to address the financial needs of MSMEs.

Despite these policies and initiatives, there is no specific strategy within any of them that narrows down to address the precise needs of youth-led and women startups who face challenges in accessing finance and markets for their products including appropriate business operating procedures. This project “Strengthening the Financing Pillars of the Entrepreneurship Ecosystem in Ghana” is designed to contribute to efforts in addressing specific needs of women and start-up MSMEs particularly, financing. It is designed to specifically create an environment that facilitates access to finance for youth-led startups and women MSMEs.

The first pillar of Ghana’s new Country Strategy Paper (CSP) 2019-2023 supports industrialization and private sector development activities including enhancing the effectiveness of the MSME and Entrepreneurship Policy and Business Environment. In Ghana, 90% of businesses are MSMEs, employing about 85% of the labour force in the manufacturing sector and a high proportion are women. However, these enterprises are often excluded from the formal financial sector because most of them are not formalized and therefore depend on personal funds and private external financing which are relatively expensive and inhibit their growth potentials

This financing gap for youth-led startups and women MSMEs in Ghana is because of several issues:

• Higher risks associated with small-scale activities.
• Sizeable transaction costs associated with MSMEs financing;
• Lack of collateral by youth led start-ups and women MSMEs;
• The poor quality of projects in terms of the business concept;
• The inability of MSMEs to make the best possible use of available resources of funding; and
• The weak institutional support for MSMEs.

These challenges can be addressed through the Industrial Transformation Agenda of the Government which has ten (10) carefully designed programmes including the Business Regulatory Reforms which seeks to improve the business environment. Initiatives such as the Youth Entrepreneurship and Innovation by the AfDB are expected to complement Government’s MSME initiatives to create an environment that will enable MSMEs businesses, particularly youth-led startups or women owned businesses contribute towards the economic transformation process and create more jobs.

A. About the Ghana MSME Connect
Platform on Financing SMES for Sustainability, provides a forum to advance knowledge sharing, data and enterprise networking, and policy dialogue on sustainable financing for MSMEs in Ghana. By bringing together public and private financial institutions, governments, Fintech companies, regulators and SME representatives, the Platform aims to bridge existing knowledge and awareness gaps and develop and share innovative, workable solutions and good practices for finance providers, MSMEs and Public Policy-Makers. This work aims to enhance dialogue among key actors in the entrepreneurial ecosystem including Youth-led Startups, Women MSMEs, Financial Institutions, Regulators, Policy Makers and MSME institutions such as the Ghana Enterprises Agency (GEA), Ghana Export Promotion Authority (GEPA), Association for Small Scale Industries (ASSI) MSMEs stand to reap important benefits from enhanced policy dialogue with public financial institutions, governments and regulators. Furthermore, peer-to-peer learning can help them implement effective solutions to boost SME awareness and demand for sustainable finance products.

B. Project Objective
The main objective is to create a multi-stakeholder platform to enhance dialogue among key actors in the entrepreneurial ecosystem including Youth-led Startups, Women MSMEs, Financial Institutions, Regulators, Policy Makers and MSME institutions such as the Ghana Enterprises Agency (GEA) and Association for Small Scale Industries (ASSI).

C. Components of the Project

• Improving access to finance and markets for Women, Youth Start-Ups / MSMEs
• Improving business operating procedures
• Project coordination and management