Ghana - UT Bank Limited Trade Finance Line of Credit

The present projet is relative to the UT Bank Ghana (UTB) Trade Finance Line of Credit (TF-LOC). This TF-LOC is a proposed USD 20 million facility to support UTB’s trade finance activities. UTB is a commercial bank with shares traded on the Ghana Stock Exchange, and the 10th largest in Ghana in terms of total assets. It was created in 2008 when UT Financial Services Limited, a non-bank financial institution, acquired a local Ghanaian commercial bank (BPI International). The major shareholders of UTB are UT holdings (40.4%), the Africa Capitalized Fund (10.1%), the International Finance Corporation (10.1%) and DEG (13.5%). The tenor of the TF-LOC is 3.5 years, and the proceeds are expected to support pre and post shipment loans, warehouse receipts, working capital and other short-term loans. Both large corporations and small and medium enterprises (SMEs) are expected to benefit from the facility. However, it is important to note that UTB defines SMEs rather uniquely and nontransparently, using a combination of size, structure and governance in a way that is difficult to verify. Based on that definition, only about 3% of the total value of its trade financing in 2012 went to SMEs.