PROPARCO partners Fidelity Bank
One of the wholly-owned Ghanaian banks, Fidelity Bank Ghana Ltd, has boosted its balance sheet with a US$13 million concessional loan from the French development finance institution, PROPARCO.
This is to enable the bank to scale up its mortgage financing portfolio.
The move is in view of the growing need for mortgage finance in the face of a ballooning middle class and growing population which have given rise to an estimated 1.5 million housing units, according to the 2010 Population and Housing Census.
The senior loan facility, coming with five years grace period before repayment, concessionary interest rate and 10 years repayment period, is expected to enable Fidelity Bank, which currently maintains about US$20 million for mortgage financing, to reach out to more customers and also meet the tarrying demands for the product.
Mortgage finance has not been bullish in the country primarily due to high interest rates and a general lack of long-term financing.
But the French Ambassador to Ghana, Mr Frederic Clavier, who signed the agreement on behalf of PROPARCO, the private sector lending arm of the development assistance institution, the French Agency for Development (AFD), said “access to credit is key to economic development by fostering long-term investments and Fidelity bank is strongly involved in addressing this”.
The Deputy Managing Director of Fidelity Bank, Mr Jim Baiden, said the resource had come in handy as it would enable the bank to satisfy the long queue of mortgage finance applicants.
The Managing Director of Fidelity Bank, Mr Edward Effah, signed the loan agreement on behalf of the bank and expressed the hope that the relationship between the bank and PROPARCO would deepen, especially after the bank acquitted itself creditably by paying off a credit it received three years ago.
PROPARCO has a standing portfolio of about 77.4 million euros with the financial services sector of the country.
The institution partners banks and other financial institutions to enable them to lend to small and medium-scale enterprises, which are regarded the growth catalysts in every economy.