The Project: Impact Investing Ghana and Ashesi University are collaborating on research to outline why, where, and how catalytic capital has been deployed in Ghana to drive the growth of small and medium-sized enterprises (SMEs). The project will consider both positive and negative outcomes of the financing and what gaps still exist.
Value and Outcomes: An estimated 92 percent of Ghanaian businesses are micro, small or medium-sized enterprises. They employ 80 percent of the workforce and generate 70 percent of the country’s GDP. This project focuses on all 16 regions in Ghana and looks in particular at marginalised groups within the broader SME sector. It aims to address the capital needs of these SMEs, taking on a critical capital gap. In emerging markets globally, the MSME finance gap is estimated at approximately $5 trillion, and 41% of MSMEs have unmet financing needs. This research in Ghana is particularly timely, as there is growing activity and an increased demand from the government and from local pension funds for concrete findings on catalytic capital targeted at SMEs.
The study will review SME financing strategies employed since the Venture Capital Trust Fund Act of 2004—a major policy initiative to drive SME funding in Ghana. It will produce a research report along with policy briefs; design a digital catalytic funding and impact investing map; issue relevant case studies; and support dissemination workshops. The team hopes to drive collaborative action among stakeholders, such as pension funds, banks, government regulators and accelerators/incubators/hubs that are relevant to SME development.