Business Development Services Fund

Access to Finance | Access to Market | eGhana

The MSME sector in Ghana represents around 30% of the workforce but contributes to around only 6% of the GDP. The Government of Ghana realizes that the development of this sector is imperative to realizing its growth and poverty reduction goals.

However, the MSME sector continues to experience difficulties in accessing financial services. They do not have sufficient access to know-how, information, and research and development to innovate and remain competitive. Their access to public contracts and subcontracts is limited, arising from cumbersome bidding procedures. Their limited international market exposure, low product quality, default in compliance with standards, and little access to international partnerships impede MSME participation into global markets. In addition, inefficient distribution channels often dominated by large firms also make it difficult for SMEs to access markets.

Additionally, despite the impressive developments in the ICT sector, and the government’s efforts to improve sector performance and responsiveness, there still remain key challenges that constrain the government’s efforts to use ICT to generate accelerated growth in general, and particularly to develop an ITES (information technology enabled services) sector and improve government service delivery.

It is in the light of these challenges that the World Bank Group (WBG) is supporting the implementation of the MSME Project, which aims among other things, at narrowing the identified gaps through interventions that support MSMEs’ access to financial and non-financial services and that address technical barriers to trade. The WBG is also supporting the Government to implement the eGhana Project, which also aims at diversifying its sources of economic growth within a transparent, accountable and efficient government, and has identified the ICT-related services.

The MSME Project specifically aims to enhance the competitive and employment levels of Ghanaian MSMEs. This goal will be achieved by:

building an integrated market access and trade facilitation infrastructure;
proactively supporting entrepreneurship development;
developing and strengthening, on a sustainable basis, the capacity of local intermediaries to deliver financial and non-financial services to MSMEs and the capacity of MSMEs to make productive use of these services;
reducing selected business constraints, including technical barriers to trade, faced by MSMEs;
providing an enabling environment (access to finance, access to markets, and trade facilitation infrastructure) to boost increased investments in the MSME sector; and
enhancing the facilitation, project development, and implementation roles of the Government.

The MSME Project will support interventions directed at specific priority sectors (such as agribusiness, construction, furniture, and textiles, horticulture, tourism) and interventions directed at broader market issues (such as access to information and export promotion activities).

Technical support to the MSMEs through a matching grant scheme, which pays for up to 50% of the cost of eligible services required to address any of the challenges (and more) identified above.

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