First National Bank Ghana
Region and country of operations: Africa, Ghana
Jurisdiction of registration: Ghana
Business sector: Bank
Date of agreement (month/year): 4/2020
Finnfund’s financing: USD 10,000,000
Share of Finnfund’s financing: 12%
Size of project/financing: USD 85,000,000
Environmental and social category: FI-B
Finnfund’s financing is a part of a DEG-led loan syndicate of USD 85 million, including Proparco and Norfund as co-lenders. Finnfund’s proposed financing is allocated to a newly formed bank through the merger of GHL Bank Limited and First National Bank Ghana following the acquisition of GHL Bank by FNB Ghana. Participation in this transaction will support the development of the nascent Ghanaian mortgage market and provide increased possibilities for lower income household home ownership.
Main development impact
The Ghanaian government estimates a shortage of about 2 million homes against a population of 30 million. The syndicated loan facility will help to grow the nascent mortgage market by maintaining GHL’s mortgage loan portfolio and improving FNB Ghana’s ability to increase its housing loan offering in the future.
FNB Ghana (previously GHL Bank) is also partnering up with a local finance institution, Shelter Afrique, to provide funding for the construction of 2,000 “Bijou Homes” housing units at a lower cost, a program which will be further expanded in the future after receiving wide-spread acclaim. GHL Bank has systematically increased its share of lower income mortgage customers, reducing its average mortgage loan size to around USD 60,000. For a low-cost housing unit currently priced at around USD 30-40,000, a household with a total income of USD 750 per month suffices to be eligible for a GHL mortgage loan.