The overall goal of the Danida support to private sector development in Ghana is to promote private business and green growth. During the second phase of the programme, ending in 2015, the following funds are offered: (i) Support Programme for Enterprise Empowerment and Development Funding Facility, (ii) Rural Finance Wholesale Fund, (iii) Merger Fund, (iv) Rural Community Banks Capacity Development Fund and (v) Loan Guarantee Facility. The Sustainable Energy fund is not yet operational. Funds may also be earmarked for providing complementary support for skills development. The third phase of the programme starts in 2016, and will last for 5 years.
Danida now intends to place all funds in operation under the second phase of the programme under a contract with a single Funds Manager (FM). The FM, which is expected to have a strong Ghanaian presence (either by working in Ghana and /or through partners and affiliates in Ghana), will offer a modified suite of products. In case the FM is a regulated financial institution, the FM will also be the custodian of liquid balances. In case the FM is not a regulated financial institution, the FM will contract with regulated financial institutions for custodial services of liquid balances.
The FM will manage and maintain the value of all funds and is responsible for the prudent use of funds. Initially, the FM will offer 2 to 3 types of products: Refinance, guarantees and possibly quasi-equity investments. The amount of funds allocated to each product will initially be guided by the on-going implementation of the financial products currently in place, but moving forward, changes are expected.
The following products are envisaged: (i) Working capital finance to Rural Community Banks, Rural Micro Finance Institutions and Savings and Loans companies; (ii) Term finance, primarily to Rural Community Banks for on-lending to rural SMEs; (iii) Guarantees in the form of investment backed guarantees, cash backed guarantees and portable guarantees and (iv) Capital Investment Fund, providing mezzanine debt to Rural Community Banks.
The FM will, under the overall supervision of the Board: Solicit interest in the various facilities; vet candidate beneficiaries and candidate partners; sign agreements with beneficiaries and partners, provide instructions to disburse, invest and recover funds, monitor all facilities, taking responsibility for holding safe the facilities; maintain a qualified staff; prepare regular reports; undergo an annual third party audit of accounts and provide secretarial services to the Board.
The contract with the FM will be performance based, and the contract will be entered into and be administrated by the Embassy of Denmark, Accra.
The FM will field a team of minimum 5 professional staff: 1 Chief Executive Officer (CEO), 1 Finance Officer, 1 Investment Officer and 2 Product Officers.
The FM must have the skilled and credential human resources and the financial capacity to manage the contract.