Fidelity Bank positioned to support startups As part of measures to accelerate the government’s drive to increase youth employment, especially for recent graduates, we have committed to using the Fidelity Young Entrepreneurs Fund to support the government’s objective. As one of the strongest and the largest privately-owned Ghanaian banks, Fidelity Bank will collaborate with the government’s YouStart programme, a vehicle to support the youth to develop commercially viable businesses. Through this collaboration, Fidelity Bank intends to help young entrepreneurs gain access to capital, and provide training, technical skills and mentoring to enable young entrepreneurs to launch and operate their businesses. “We are a partner to YouStart and we are going to play a more active role in supporting the government through the YouStart programme,” our Managing Director, Mr Julian Opuni, said in an interview with the Graphic Business. “Before YouStart was introduced, we had established the Fidelity Young Entrepreneurs Fund to address some of the pain points that young entrepreneurs were facing with respect to access to capital. We decided to create a program with reduced capital access requirements that were more tailored to appreciate the potential of these small-scale enterprises, particularly those that were not at the full growth stage. Under the Fidelity Young Entrepreneurs Programme (FYEP), which comprises the Fidelity Young Entrepreneurs Fund and the Orange Corners Innovation Fund, 49 youth-led businesses have benefited from lower interest rate loans, easier access to finance and participation in an ecosystem that supports them,” he said. In the area of training, Mr Opuni also noted that for those businesses that are not ready for financial support, “we offer training and capacity building including business plan assistance.” To augment our support for young entrepreneurs, Mr Opuni added that the bank partnered with the Dutch government on a project called Orange Corners where young entrepreneurs are provided with access to additional funding and specialized training, among other things. Mr Opuni said that the bank through its Orange Corners programme has worked with 3 cohorts comprising of 30 MSMEs with loans disbursed to 27 of them and is currently on its 4th cohort made up of 14 MSMEs. Fund size Describing how much was used for the pilot, Mr Opuni said “Our pilot fund was GH¢10million, and about half of that has been disbursed. We focused on businesses led by entrepreneurs ranging in age from 18 to 40 years old. Additionally, our objective was to identify those businesses that show promise.” He added that the bank expects that going forward, a higher percentage of the bank’s loan portfolio will expand beyond the youth segment into the broader SME sector which is reflective of the reality of the market. He noted that in 2021, Fidelity Bank disbursed a total of approximately GHS485m to the various SME subsectors of the economy including Agribusiness, Health, Education, FMCGs, Youth businesses etc. Challenge with SMEs Mr Opuni said that as much as SMEs are classified as risky to do business with, the bank has devised innovative means to address the needs of SMEs while minimizing the perceived risks. Mr Opuni said to mitigate against some of the risks, the bank, in partnership with some insurance companies will insure some of the risks by creating SME specific insurance products. Future of SMEs Asked about the future for SMEs, Mr Opuni responded: “The future remains bright for SMEs as they will continue to drive the economy. The onus will be on the banking sector to continue to positively impact the SME sector. When speaking of the economy, banks will have to innovate and find a way of growing the economy and a vibrant SME sector is key to the growth of the economy. Quite frankly, if the economy in Ghana stagnates, banks in Ghana will stagnate”.
