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Finnfund, a Finnish development financier and professional impact investor, has granted a $10 million senior loan to First National Bank Ghana – a subsidiary of FirstRand Group, the South African financial services provider. In a statement sent to Financial Nigeria on Monday, the development finance institution (DFI) said a key objective of the investment is to support the Ghanaian financial sector and the growth of small and medium-sized enterprises (SMEs) in the country.  

According to data from the Registrar General's Department, Ghana's SMEs contribute about 70 per cent to the country's gross domestic product (GDP). SMEs in the country are considered the backbone of economic and social development, providing jobs and income for the people.

The debt financing to support the business expansion of FNB Ghana comes three months after the bank acquired GHL Bank, a leading provider of mortgage financing in Ghana, in May. Finnfund said the loan will be used particularly to increase affordable housing in the country, which has a housing deficit of approximately two million housing units.

“The recent acquisition of GHL Bank positions FNB Ghana strongly to utilise this debt package to achieve both Finnfund’s investment objectives and FNB Ghana’s strategy to scale home ownership in the country,” said Dominic Adu, CEO of FNB Ghana.

Finnfund said the loan is part of a debt package syndicated by Deutsche Investitions- und Entwicklungsgesellschaft (DEG), a German development financier. The Finnish DFI also said about half of its total investments and commitments of €957 million is in Africa. In September 2019, Finnfund invested $6 million to expand aquaculture in Zambia.

Commenting on the investment in FNB Ghana, Jussi Ahonen who works as Senior Investment Manager at Finnfund said, "Particularly now, in the midst of the coronavirus pandemic, we want to strengthen Ghanaian financial sector. This debt package provides additional capacity to FNB Ghana to accelerate the development of the mortgage market in the country."