Indigenous bank, Consolidated Bank Ghana, (CBG) has secured GHc150 million on the Ghana Stock Exchange to boost Kasapreko Company Limited’s expansion project.
This is part of a whopping GHC600 million facility earmarked to bolster the company’s working capital, fund capital expenditure for operations expansion, and refinance short-term debts.
Notably, the debt instrument acquired from the stock market carries a lending rate of 26%, a significant reduction compared to the Ghana Reference Rate of approximately 34%. This financial arrangement offers a fixed rate over a three-year period.
Daniel Addo, the MD of CBG, said collaboration between indigenous companies is a vital strategy to surmount financing hurdles through innovative approaches, thereby fostering national development.
Speaking at a joint press briefing with Kasapreko in Accra on Monday (19 February), Addo said: “The solution to our challenges funding local corporates and Small and Medium-sized Enterprises (SMEs) lies with us, and it’s really around how banks, other financial institutions and industry players address the risks inherent in SMEs, in particular.”
He encouraged financial institutions and industry players to confront risks head-on, stating, “Our business is not to run away from risks, but to manage those risks, and advise local business on how best to run their purse to grow.”
Addo reaffirmed CBG’s commitment to supporting Kasapreko Limited and other Ghanaian businesses, pledging unwavering assistance.
“With this transaction, CBG continues to execute its strategy of providing innovative funding solutions, whilst also sending out a strong signal that our syndications and markets desk business is open for business,” he said. “… We reiterate our commitment to the Ghanaian entrepreneur and reaffirm our pledge to stand with you through the good and the bad times.”
Managing Director of Kasapreko, Richard Adjei, acknowledged the challenging times Ghanaian companies have faced since the onset of the COVID-19 pandemic. He expressed optimism that this innovative financing source would bolster their operations.
He described the financing scheme from the Ghana Stock Exchange as a relatively cheaper, patient capital, and sustainable source for business growth.
“CBG made us understand that we can fund our business from other sources, and this is to diversify our funding from the traditional banks, raise cheaper and more sustainable funding,” he said.
