Ghana integrates green finance into bank lending — MyJoyOnline
In Ghana, green finance is increasingly being integrated into standard bank lending decisions, particularly for small and medium-sized businesses. As noted by Priscilla Ashiam, an Access Bank Ghana representative and the author of a MyJoyOnline article, banks are increasingly taking environmental and social risks into account, while energy efficiency, water and waste management can affect companies’ access to capital and financing terms.
According to Ashiam, climate change is already creating additional costs for businesses due to more expensive energy, supply chain disruptions, logistics delays caused by flooding, and unstable electricity supply. According to estimates cited in the publication, small and medium-sized businesses account for about 92% of Ghana’s registered enterprises and generate nearly 70% of the country’s GDP.
Regulatory changes
The article states that the Bank of Ghana’s Sustainable Banking Principles, developed with the participation of the International Finance Corporation and the Ghana Association of Bankers, set out approaches for financial institutions to assess environmental and social risks. According to the author, the industry’s level of compliance with these principles has increased from about 42% to 73%.
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In October 2024, Ghana’s Ministry of Finance published the country’s first green finance taxonomy. It is intended to establish a common definition of “green” activities for banks, investors, and companies in the energy, transport, agriculture, water supply, waste management, and construction sectors. The Bank of Ghana’s directive on climate-related financial risks, dated May 2024, requires regulated institutions to assess and report climate risks in their loan portfolios.
Working with small businesses
Ashiam believes that the main obstacle for small and medium-sized businesses is a lack of information about available financial instruments and lenders’ requirements. In June, Access Bank Ghana held a two-day green finance and sustainability seminar in Accra for small business owners, prospective clients, and bank employees. The event took place as part of the bank’s partnership with Birmingham City University, which began in 2024.
According to the author, the bank plans to take into account energy-efficiency practices, cleaner production, and better water and waste management when assessing borrowers. Companies with such practices may qualify for more favorable financing terms.
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