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Linking matching grants with loans: Experiences and lessons learned from Ghana

Topic :

This study presents the results of an assessment on the use of matching grants (MGs) in combination with bank loans to finance productive investments by two IFAD co-funded programmes in Ghana. The study assesses the effectiveness and impact of MGs along four dimensions:technical, economic, financial and operational. In particular, it looks at thefollowing aspects: i) appropriateness and reliability of the financed equipment; ii) impact in terms of employment creation, turnover and profits; iii) access to finance, especially loans; and iv) appropriateness of the financing package (including MG, loan andbeneficiary contribution) regarding the investment and incremental workingcapital requirements. This Technical Note provides practical suggestions and guidelines to country programme managers and project design teams to help them design and implement programmes and projects.

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