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Summary of Proposed Investment

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only.

Project number 25761
Sector1Commercial Banking - Microfinance and Small Business
Environmental categoryFI
Date SPI disclosedAugust 28, 2007
Projected board dateOctober 1, 2007
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Project description
This is a joint project involving IDA, IFC and the Government of Ghana (GoG), consisting of a Line of Credit (LOC) of up to $7.5 million for Merchant Bank, Ghana (MBG) to be used to support lending to Small and Medium Enterprises (SME).

The LOC made available to MBG will be coupled with performance-based grants as an incentive to encourage MBG to achieve set targets.

In addition to the guarantee, the project envisages two technical assistance (TA) components:

- TA to Merchant Bank, with the objective of transferring the necessary skills and procedures to better service the SME sector and thus enhance the banks’ capacity to underwrite new SME loans on a profitable and sustainable basis; and
- TA to SMEs, which aims to help bridge the gap between the SMEs and the banks by providing some basic financial and management training to the SMEs.

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