Republic Bank Ghana Limited The project consists of a senior loan of up to US$40 million for 5 years to Republic Bank (Ghana) Limited (RBGH or the Bank) to support the growth of its Small and Medium Enterprises (SME) portfolio. The proposed senior loan will support the Bank in expanding its reach and services to SMEs that are severely underserved and in need of access to finance to grow their businesses (the Project). The Bank has expressed interest in carving out 25% of the proposed senior loan to grow its climate finance business. Stakeholders' Impact:

 - The Project is expected to provide long-term funding to SME borrowers. Longer-term financing is scarce in Ghana, and an especially binding constraint for some SMEs. According to the World Bank Enterprise Surveys, 5% of SMEs did not apply for a loan because maturity levels and loan sizes were inadequate. This is higher than the lower-middle income average of less than 2%.
- The Bank's current average tenor for SME loans is 12 months, and only 21% of loans have maturities over 36 months. The Project will enable the Bank to extend the average tenor of its loans to SMEs to 36 months. It is estimated that 72% of SMEs in Ghana currently do not have access to finance. The SME finance gap expressed as a percentage of GDP in Ghana was 13%, according to the most recent available IFC data (2017) and is likely to have widened over the past year in the context of asset quality issues in the banking sector, which caused banks to curb lending. 
- IFC anticipates that the Project will provide financing for 2,500 additional SMEs, increasing the Bank's SME reach in terms of number of loans to an outstanding portfolio of 4,500 SME loans worth US$330 million by 2023 from US$137 million as of December 2018. The Bank plans to increase the SME share of its overall loan portfolio from 51% as of 2018 to 65% by 2023, through increase in digital channels, leveraging RFHL's experience in providing SME banking to scale up their operations. The Bank's SME loan book is currently focused on the oil and gas, general trading, manufacturing, health, agriculture (non-traditional) and services sectors which make up about 80% of the Bank's SME loan book.

 Environmental and Social Impact: 

- Climate finance is a relatively new concept for banks in Ghana, with just a few banks in the country exploring green building finance.  However, the growth of climate finance has faced challenges primarily because of constraints of inadequate long-term funding and lack of dedicated incentives for developers. 
- Against this backdrop, Ghana's INDC states that the country needs US$22.6 billion to deliver on the Ghanaian government's climate commitments in accordance with the Paris Agreement. By on-lending over longer terms to an overlooked borrowing sub-segment in the country, the Project is expected to help reduce greenhouse gas emissions by 14,697.65 tons CO2. IFC will assist the Bank in defining its green finance strategy, identifying climate-eligible projects and training its staff in the areas of energy efficiency, climate-smart agriculture, and green buildings. 
- With 25% of the senior loan targeted at climate smart SMEs these stakeholders will benefit from access to longer tenured facilities for climate smart projects. 

Market Impact Assessment: 
Competitiveness:
 - Through a replication channel, the Bank's on-lending of longer-term finance to SMEs, with a focus on climate-smart SMEs, is expected to demonstrate to the wider local market that these are attractive investment subsegments.
 - As a mid-tier bank, the Bank is a seen as a market leader for smaller banks, which tend to follow its lead in the market. In addition, the rebranding exercise which took place in April 2018 has positively influenced the Bank's competitive position in Ghana, prompting both local and international banks operating in Ghana to begin following the Bank closely to ensure they can proactively respond to any new trends, products, and innovations introduced by the Bank, which leverages lessons from its parent, RFHL.
 - To this end, it is expected that the Bank's strategy to grow its SME book (including climate-smart SMEs) will be replicated by many of its competitors to keep up with the market.