German Development Cooperation and Innohub Foundation have completed the Ghana SME Impact Investment Support (GSIIS) Project, a two year initiative that combined nearly three million euros in private capital with tailored technical assistance for over 20 small and medium sized enterprises across multiple sectors.
The closing event marked the culmination of targeted support addressing what remains one of Africa’s most persistent economic challenges: the massive financing gap that prevents SMEs from scaling operations, creating jobs, and contributing fully to economic development.
SMEs represent over 80 percent of businesses in Ghana, yet they face substantial barriers accessing finance that hampers growth and job creation capacity. Across Sub Saharan Africa, SMEs confront a financing gap of nearly $331 billion, with Ghana accounting for an estimated $4.8 billion of that shortfall. The GSIIS project aimed to mitigate these barriers by providing resources specifically designed to make participating companies more investment ready and operationally sustainable.
The project provided comprehensive pre and post investment technical assistance covering marketing, e commerce, financial management, human resources, process optimization, resource efficiency, and health and safety. This support model combined private capital injection from impact investors with expertise ensuring long term sustainability for participating companies.
Ms. Eunice A. Agyepong, Head of the SME Component of Invest for Jobs at GIZ Ghana, reflected on the project’s dual approach. The GSIIS project has demonstrated the power of combining financial investment with technical assistance. This dual approach has ensured that the supported SMEs are well prepared to thrive and contribute positively to Ghana’s economy. We are proud of the achievements and the lasting impact this project will have on the local business landscape, she stated.
She called on other stakeholders to join investment support efforts for SMEs, emphasizing that bridging the financing gap requires coordinated action from government, development partners, private investors, and support organizations working in concert.
Mr. Nelson Amo, Executive Director of Innohub, emphasized the integrated nature of successful SME support. The GSIIS Project has demonstrated the unique value of combining pre and post investment technical assistance with catalytic capital. This integrated approach equips SMEs with the clarity, structure, and operational strength they need to scale sustainably, he explained.
At Innohub, initiatives like GSIIS sit at the core of our belief that when development partners, investors, and business support organisations work together, we can build high growth, investment ready businesses that drive meaningful economic transformation. We are proud to have contributed to this ecosystem effort, Mr. Amo added.
The project forms part of the Special Initiative Decent Work for a Just Transition, operating under the Invest for Jobs brand and funded by the German Federal Ministry for Economic Cooperation and Development. The broader Invest for Jobs framework supports multiple interventions across African countries aimed at creating decent employment opportunities through private sector development.
Ghana has witnessed steady increases in impact investments into SMEs in recent years, with funds focusing on innovative potential and sustainability efforts of local businesses. Impact investors target enterprises seeking to create social value alongside financial returns, often prioritizing job creation for traditionally disadvantaged groups including women and youth.
The GSIIS project played a role in bridging the resource gap that frequently prevents SMEs from achieving growth objectives. By equipping businesses with tailored technical support and expertise, the project enhanced operational capabilities while contributing to broader economic development goals.
The financing challenge facing Ghanaian SMEs remains stark despite various interventions. While SMEs contribute approximately 70 percent to GDP, constitute 92 percent of all businesses, and account for 85 percent of manufacturing related employment, they struggle to access capital from traditional financial institutions.
Commercial banks typically consider SMEs unattractive and unbankable due to perceived high risk and default rates. Research shows that among SMEs applying for loans from commercial banks, only 16 percent receive approval, leaving 65 percent denied access to credit. This systemic rejection forces SMEs to seek alternative financing sources including microfinance institutions, development finance interventions, or remain constrained in their operations.
The financing gap affects different segments unevenly. Women owned enterprises, businesses in northern regions including Upper West and Upper East, and sectors like agriculture, forestry, and fishing face especially acute shortfalls. These same regions and populations already experience higher multidimensional poverty rates, creating a compounding effect where limited access to finance reinforces existing disadvantages.
Conventional capital seeking market rate returns has proven ineffective at bridging the SME financing gap because investors perceive small businesses as too risky. This reality creates space for impact investors willing to accept concessional terms, longer investment horizons, or below market returns in exchange for measurable social outcomes.
Catalytic capital represents a specialized form of impact investing designed specifically to unlock additional commercial capital that otherwise would not flow to underserved sectors. By accepting first loss positions, providing patient capital, or offering technical assistance grants alongside equity investments, catalytic capital providers enable innovative financing models to launch and scale.
The GSIIS model exemplifies this approach. Rather than simply providing loans or equity investments, the program structured comprehensive support packages addressing both capital needs and capacity gaps simultaneously. This integrated model recognizes that many SMEs lack not just money but also management systems, market connections, operational processes, and strategic planning capabilities that investors require before committing funds.
Pre investment technical assistance proved particularly valuable. Many SMEs possess strong business concepts and dedicated founders but struggle to articulate clear growth strategies, demonstrate financial controls, or present investment ready documentation. GSIIS support helped participating companies clarify their value propositions, strengthen governance structures, and prepare materials enabling productive investor conversations.
Post investment assistance ensured that once capital arrived, companies could deploy it effectively. Technical experts provided ongoing coaching on using new equipment, implementing quality management systems, developing marketing strategies, and establishing human resource policies. This follow through maximized the impact of invested capital and reduced the risk that funds would be wasted through inexperience or poor planning.
The emphasis on resource efficiency and health and safety reflected recognition that sustainable businesses must operate responsibly. Companies adopting green practices, minimizing waste, and protecting worker safety position themselves more favorably for future investment rounds and contracts with multinational corporations increasingly emphasizing environmental, social, and governance standards.
GIZ’s track record implementing SME support programs in Ghana extends beyond GSIIS. The African SME Network for Exchange and Trade initiative, completed in September 2025, provided over 200 pieces of machinery and equipment to more than 50 SMEs through co financing arrangements. That project combined equipment procurement with training in quality management, international marketing, and occupational safety, complemented by customized in factory coaching.
Through AfNEXT, participating SMEs gained international exposure via joint learning sessions with enterprises from Egypt and Ethiopia and attendance at trade fairs across Europe, Africa, and other regions. The program created more than 300 decent jobs and significantly enhanced productivity, competitiveness, export readiness, innovation capacity, and job creation potential of beneficiary companies.
Earlier, an SME Grant Scheme for Job Creation project implemented in 2022 supported 65 Ghanaian SMEs to acquire equipment needed for core operations, enabling expansion and job creation. These successive interventions demonstrate sustained German development cooperation commitment to strengthening Ghana’s private sector through targeted, practical support mechanisms.
Innohub brings complementary expertise as a business accelerator and impact investment platform helping small and growing businesses with high growth and impact potential become investment ready, sustainable, and scalable. The organization sponsors SME finance vehicles including Wangara Green Ventures Capital Fund and Accra Angels Network, positioning it at the intersection of business support services and capital mobilization.
The GSIIS project’s completion comes as Ghana’s broader economic environment shows improvement. Inflation declined to 8.0 percent in October 2025 from 23.5 percent in January, while GDP growth reached 6.3 percent in the first half of 2025. Private sector credit growth turned positive after contracting earlier in the year, signaling gradual recovery in lending activity.
These macroeconomic improvements create more favorable conditions for SME growth and investment. Lower inflation preserves purchasing power and reduces input cost volatility. Economic expansion generates demand for goods and services SMEs provide. Recovering credit flows mean more businesses can access working capital for inventory, equipment, and expansion.
However, structural challenges persist. Interest rates on commercial loans remain elevated despite monetary policy easing, with average lending rates at 22.2 percent in October 2025. Many SMEs cannot service debt at these rates while maintaining profitability. Hidden charges and lack of transparency in loan pricing further discourage borrowing.
Collateral requirements pose another barrier. Bank of Ghana data shows that in the fourth quarter of 2024, SMEs held only 18.5 percent of total secured loans valued at GH₵8.2 billion, while large enterprises commanded 48.5 percent. Micro businesses accounted for just 1.8 percent, down from 3.3 percent a year earlier. Without assets to pledge, small businesses struggle to meet lending criteria regardless of business viability.
Government interventions including the Coronavirus Alleviation Programme Business Support Scheme, Ghana Jobs and Skills Project, and SME Growth and Opportunity programme provided grants and credit facilities to thousands of businesses. However, beneficiaries often report that funding amounts remain insufficient relative to actual capital needs, with grants of GH₵4,000 to GH₵5,000 inadequate for meaningful capacity expansion.
The persistence of these challenges underscores why initiatives like GSIIS matter. By combining patient capital, technical expertise, and investor networks, such programs create pathways for SMEs to overcome multiple barriers simultaneously rather than addressing financing in isolation.
As the project concludes, GIZ and Innohub Foundation remain committed to exploring further opportunities supporting Ghanaian SMEs and driving sustainable economic growth. The partnerships, methodologies, and lessons learned through GSIIS provide blueprints for scaling impact across additional enterprises and sectors.
The fundamental challenge of matching capital to opportunity persists. Billions of dollars in potential value remain locked inside Ghanaian SMEs lacking the resources and support to unlock their growth potential. Development finance interventions like GSIIS chip away at this gap enterprise by enterprise, demonstrating what becomes possible when investment and capacity building work in tandem.
For the 20 plus companies that participated in GSIIS, the project provided more than funding. It delivered expertise, networks, processes, and confidence needed to compete effectively. Whether these enterprises can sustain momentum, scale operations, and create the jobs Ghana urgently needs will unfold over coming years.
The broader ecosystem remains works in progress. More impact investors must enter the market. Commercial banks must develop products and risk assessment frameworks suitable for SME lending. Government policies must reduce regulatory burdens while strengthening contract enforcement and business enabling infrastructure. Business support organizations must expand capacity to serve thousands of enterprises needing assistance.
The completion of GSIIS marks success for two dozen companies and their employees. Achieving the transformation Ghana’s economy requires means replicating such interventions hundreds or thousands of times across all regions, sectors, and business sizes. The gap remains measured in billions. Progress comes enterprise by enterprise, intervention by intervention, partnership by partnership.