Three sign pact to develop Integrated Financial Ecosystem to support growth of Asia-Africa SME trade corridor

The Monetary Authority of Singapore (MAS), Bank of Ghana (BOG) and Development Bank Ghana (DBG) has signed a Memorandum of Understanding (MOU) to develop the Ghana Integrated Financial Ecosystem (GIFE).

GIFE aims to enhance financial capabilities and access for micro, small and medium enterprises (MSMEs) in Ghana and generate greater opportunities for trade and financial services cooperation between Singapore and Ghana.

Over time, it is envisaged that the integrated financial ecosystem model can serve the Asia-Africa SME trade corridor more broadly.

A release issued by the Bank of Ghana said “the GIFE will offer an open digital infrastructure for MSMEs in Ghana and Singapore in four key areas.

First, it said “The SME Financial Empowerment Programme will help MSMEs build foundational digital financial literacy skills and gain a good understanding of cross-border financial services.

Secondly, the MSMEs in Ghana and Singapore can expand their international business connections in Asia and Africa, through a network of business-to-business e-commerce platforms.

Thirdly, the DBG and partner financial institutions will provide digital trade finance and guarantees for eligible MSMEs through a digital platform.

Lastly, the release said MAS, BOG, DBG and financial institutions will jointly develop financial trust frameworks to assess credit worthiness for financing by enabling financial institutions to use alternative data sets, such as the track record of successful payments to suppliers and tax payments to relevant authorities.

The release said “Bank of Ghana is the central bank of Ghana and Development Bank Ghana is a development financial institution set up in 2022 to provide long-term lending to Small and Medium Enterprises.”

It add that an example is the Financial Trust Corridor (FTC) initiative to engender greater trust, trade and recognition between both countries’ businesses and financial institutions.

Collaborative effort

It noted that the GIFE is a collaborative effort across public entities, financial institutions, FinTechs and tech solution providers in Ghana and Singapore.

These include Proxtera3, Consolidated Bank of Ghana, ANEXT Bank, Enterprise Singapore, and the Global FinTech Institute.

Working closely

The Chief FinTech Officer, MAS, Sopnendu Mohanty, said in the release that, “MAS has worked closely with Bank of Ghana since the announcement of the Financial Trust Corridor in 2020.

He said GIFE was an important step to foster closer collaboration between the two central banks and important emerging markets.

He said it was a rethink to potentially leapfrog traditional financial inclusion approaches with combined support mechanisms powered by smarter data that MSMEs and financial institutions can tap on based on their needs.”

BoG’s commitment

The Governor of Bank of Ghana, Dr Ernest Addison, on his part said “This memorandum further demonstrates BoG’s commitment as a central bank, to working with key stakeholders to explore innovative financing models.

It also further demonstrates our commitment to the Business Sans Borders initiative which we partnered with the Monetary Authority of Singapore to enhance MSME contribution to economic growth and in line with Government’s
broader economic transformation goals.

Pivotal moment

The Chief Executive Officer, DBG, K Duker, said, “We believe that this partnership with the Monetary Authority of Singapore and the GIFE programme mark a pivotal moment in DBG’s mission to provide sustainable finance solutions to Ghanaian businesses and facilitate multi-generational, sustainable economic growth.

DBG recognises the crucial role of SMEs in our country’s economy and the GIFE programme will further strengthen DBG’s ability to catalyse SME growth by ensuring that they get the financial solutions they need to achieve their full potential.”

He said “SMEs are a key pillar of Ghana’s economic resilience, prosperity, and

international competition, so I’m optimistic that our journey to unlock their potential will yield excellent results for our people and country.”

The Chief Executive Officer, ANEXT Bank, Toh Su Mei, said, “ANEXT Bank is honored to join this private-public taskforce in co-creating the FTC trust data framework to promote more trust amongst businesses and financial institutions globally.

It allows us to make financial services accessible and effortless for more SMEs as growing businesses can get access to global trades, and be more resilient against macroeconomic market disruptions.”