British International Investment

Growth Investment Partners Ghana Ltd (GHS)

West AfricaFinancial services

Growth Investment Partners (GIP) Ghana provides long-term flexible capital, primarily in local currency, to small and medium-sized enterprises (SMEs) in Ghana.

Our investment

Description of the investment.

Through the launch of Growth Investment Partners (GIP) Ghana, we aim to provide long-term flexible capital, primarily in local currency, to small and medium-sized enterprises (SMEs) in the West African country. The goal is to boost business growth and well-being, create jobs, and deepen SME contribution to the Ghanaian economy. GIP aims to establish itself as a new alternative investment option for long-term capital from local institutional investors in Ghana, driving innovation amongst other financial institutions.

Impact information

Applies to investments made from 2019 onwards. The tabs in this section define what we expect to achieve through the investment, assessing the potential impact of the investment against six dimensions of impact. You can find more details on our methodology of assessing impact here.

What?

Impact
  • Increased economic opportunities for employees and suppliers, as well as increased access to goods and services for domestic consumers due to increased firm growth and wellbeing (SDGs 8.3, 8.5).

  • Strengthened capacity of domestic financial institutions to expand access to financial services to SMEs (SDG 8.10).

How?

Primary Secondary
  • Catalysing markets: If successful, GIP could drive wider, lasting financial market system change by 1) encouraging other players to respond to the disruption by the new product suite and model, and the 2) replication of the model in other markets.
  • Economic enabler: GIP will offer flexible, longer-term finance to un- and underbanked SMEs in Ghana. This will support firm growth and create increased economic opportunities for firm employees, suppliers, and customers.

Who?

Stakeholder Geography Characteristics
Employees

Ghana, possibly beyond

The socio-economic characteristics of firm employees, suppliers, and consumers is difficult to establish ex-ante. GIP management has already identified (local) third-party investors which may respond to GIP success over time. GIP will initially target medium-sized firms (50-300 staff) to prove the viability of the new vehicle and its products. Thereafter, GIP may target selected, high performing smaller firms (15-49 staff). GIP will adopt an initial sector agnostic approach, but agriculture, healthcare and retail are the top three industries in the initial GIP pipeline.

Suppliers

Ghana, possibly beyond

Customers

Ghana, possibly beyond

How much?

Scale Depth/Duration

Initial discussions have indicated third-party appetite to invest in GIP.

GIP will provide capital to SMEs of $500k – $5m, equivalent in local currency, and it will support up to 150 Ghanaian SMEs within the next 15 years.

New investors are expected to come in towards the end of 2024, enabling impacts beyond year 15. We expect replication and competition effects amongst other financial institutions could begin from year 3 - 8, while impacts on SMEs will be generated from year 1.

Contribution/additionality

Contribution/additionality
  • Financial additionality (GIP level): There is currently no alternative source of capital to support the platform should we not move ahead. But, mobilisation from third-party investors remain promising and ongoing.

  • Value additionality (GIP level): High, as it is co-designing a new and bespoke SME financing platform in Ghana.

  • Financial additionality (SME level): GIP provides an innovative and differentiated product suite for financing SMEs in Ghana. Capital is available to GIP’s target firms, but is not offered on the same terms nor in sufficient quantities.

  • Value additionality (SME level): The offer to GIP's target firms is hands-on and additional in relation to traditional financial institution approaches to business services support.

Risk

Execution Risk

The management team has highly relevant expertise and experience but the creation of a platform with new products (especially during a macroeconomic downturn) presents a series of strategic and operational risks. This will be mitigated by detailed design, a quality management team, and tranched funding.

Alignment Risk

Any alignment risk is mitigated by linking the management team’s long term incentive plan to key impact performance indicators, alongside implementing proper governance controls and having advocacy support in place.

Evidence Risk

Firm and underlying stakeholder-level impacts are difficult to determine ex-ante. This will be mitigated through monitoring and follow-up surveys.

Impact score

Impact score (at point of investment)

The Impact Score is a tool to help us manage our performance against our strategic impact objectives. It is designed to incentivise investments that support our productive, sustainable, and inclusive objectives. You can find out more here.

The Impact Score is published for investments made from 2022 onwards. The Impact Scores are calculated at the point of investment. We publish the Impact Scores of new investments annually, once the information has been externally assured by an independent third party.

7

Environmental and social information

  • Environmental and social summary

    A high-level description of the environmental and social aspects of the investment. This may include a summary of key environmental and social risks identified during environmental and social due diligence (ESDD); key elements of an environmental and social action plan (ESAP); or ways in which we plan to support the investee improve environmental and social standards, such as through their environmental and social management system (ESMS); as well as any other priority areas agreed with the investee.

  • Environmental and social risk

    A risk category rating, which indicates the level of environmental and social risk associated with an investment. For an explanation of the categorisations used, see here. We consistently provide an environmental and social risk category for all investments screened from 2023 onwards.

Environmental and social summary

We are working with GIP on developing its environmental and social risk management processes and capacity. This includes the development of an ESMS, as well as HR, safeguarding and supply chain processes. We have also established an ESG Impact Committee to ensure GIP adopts, implements, and manages environmental and social practices in accordance with BII’s requirements.

Environmental and social risk

Medium-Low

Reporting and Complaints Mechanism

The Reporting and Complaints Mechanism allows anyone outside BII to report alleged breaches of the business integrity or environmental and social provisions of BII’s Policy on Responsible Investing. This includes breaches made by BII, a BII investee, or a portfolio company of a fund in which BII has invested. The Reporting and Complaints Mechanism Rules are available here. Reports and complaints can be submitted by email to [email protected] or by mail. See more details on our Reporting and Complaints Mechanism here.

For any other general enquiries contact us at [email protected]

  • Key facts

    Last updated

    When the last quarterly update of the website database occurred.

    :
    March 2024
    Project number

    An identifier number shared by investments in the same project.

    :
    D4995
    Status

    The current status of the investment (green flag for active and red flag for exited).

    :
    Active
    Region

    The geographical region where the country is located. We currently invest in Africa, South Asia, South East Asia and the Caribbean. In 2023, BII’s investment mandate was extended allowing it to invest in regional funds linked to Ukraine, with the majority of activity expected to begin post-war. Investments outside these regions were made prior to 2012 under previous investment mandates.

    :
    West Africa
    Sector

    We prioritise those sectors that facilitate development and need our capital the most. Our priority sectors contribute towards many of the Sustainable Development Goals. They range from investing in the power infrastructure that will provide people with better access to electricity, to investing in financial institutions that direct capital to the individuals and businesses that need it the most.

    :
    Financial services

    We provide capital in the following ways: directly – through direct equity, direct debt, guarantees and other non-intermediated financial instruments; and indirectly – principally through investment funds.

    For direct investments and fund investments, this is the date BII committed capital to the investments. This is typically the date on which legal agreements are signed by all parties.

    For the portfolio companies of our fund investments, this is the date (either the month or the quarter) on which the fund committed capital to the portfolio company.

    For direct equity investments, this is the date at which British International Investment exited the investment.

    For debt investments, this is the date at which the final debt repayment was made.

    For funds, this is the date at which the fund was terminated.

    For underlying fund investments, this is the date at which the fund manager exited the investment.

    The total amount committed, per financial instrument, per investment, on the date BII becomes subject to a binding legal obligation to provide funding or assume a contingent liability. This information is provided in US dollars.

    For direct investments, this is the amount that BII has committed to the business or project. For fund investments, this is the amount BII has committed to the fund.

    The currency in which the investment was made.

    Investment type :
    Equity
    Start date :
    August 2022
    Amount :
    $500k
    Currency of investment :
    USD
    Domicile

    The company or investment fund’s place of incorporation.

    :
    Ghana
    2X Gender Finance

    Indicates whether the investment is ‘2X qualified’ using the 2X Challenge criteria. You can find out more here. It only applies to investments made from 2018 onwards, when the 2X Challenge was first launched.

    :
    Fully qualified

Related investments made by BII into this company:

Investment name Commitment Region Sector Start date Status
Investment 02 $49m West Africa Financial services July 2023 Active

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