At sunrise in Makola Market in Accra, traders are already buying and selling goods. Many run small businesses yet remain without access to the credit that could help them grow and scale their operations.

In Ghana, micro, small and medium-sized enterprises (MSMEs) account for more than 90 percent of all businesses. Yet nearly 70 percent do not survive within their first five years, not for lack of effort or enterprise, but because of financial constraints, stringent lending criteria, and limited access to appropriate financial services.

The digitalization of financial services is expanding access to bank accounts and making digital payments easier across the country. But access to an account is not the same as access to capital. Most MSMEs still operate without the financial records that lenders rely on to assess creditworthiness, no formal ledgers, no credit history, and no reliable data trail that a loan officer can use to evaluate risk.

As a result, financial institutions often apply high interest rates, adopt cautious lending practices, or avoid MSME lending altogether. The outcome is a persistent financing gap that continues to limit the growth and sustainability of early-stage enterprises across Ghana.

At the United Nations Capital Development Fund (UNCDF), we recognize that breaking this cycle requires new approaches to credit risk assessment and stronger partnerships between financial institutions and fintech companies that can turn digital business data into reliable inputs for lending decisions.

Merging technology with local lending presence

In response, UNCDF, with funding from the United Nations Joint SDG Fund, launched the Joint Programme on Leveraging Digital Ecosystems for Increased MSME Productivity in 2024 to support financial institutions and fintech companies to digitize MSME lending and expand access to finance for underserved enterprises in Ghana.

This programme is co-implemented with the United Nations Conference on Trade and Development (UNCTAD) and the United Nations Development Programme (UNDP) and will run until 2027.

UNCDF’s focus over the course of four years is to provide $600,000 in investment grants and technical assistance to five financial institutions and fintech companies: Adehyeman Savings and Loans Ltd, Fido, MoMo, Opportunity Ghana, and Solis Finance. This support aims to test whether digital lending models using online data can enable financial institutions to lend to MSMEs more efficiently and at scale. Through the deployment of catalytic concessional capital and technical support, UNCDF expects that these five institutions will mobilize $14.2 million in additional market finance both from the private and the public sector, targeting a leverage ratio of 4:1.

For example, Adehyeman, one of the supported financial institutions serving informal-sector clients, partnered with Oze, a fintech start-up specializing in digital lending systems, to test and refine a new lending model under real market conditions.

A small business owner in Darkuman registering on Adehyeman’s platform powered by Oze's technology, with support from a loan officer. Photo: Mio Yuki, UNCDF.

A shop owner in Darkuman (right) after registering on Adehyeman’s platform powered by Oze's technology, showing interest in accessing formal financial services to support the growth of his business. Photo: Mio Yuki, UNCDF.

Through this collaboration, Adehyeman is digitizing loan creation and credit assessment using Oze’s Lending Management System. The system replaces manual, paper-based workflows with a structured digital process and uses non-traditional data, including MSMEs’ mobile money transaction patterns, to assess credit risk. Adehyeman’s loan officers review and apply these assessments as part of their lending decisions.

On one hand, Adehyeman brings its deep local market knowledge, trusted MSME relationships, and the regulatory mandate to lend. On the other hand, Oze provides digital lending technology that allows licensed financial institutions such as Adehyeman to digitize loan applications and assess credit risk, while continuing to originate and deliver credit through their regulated lending infrastructure.

Sequencing digitization for market adoption

Making digitization work in practice requires careful sequencing. Adehyeman and Oze are taking a phased approach to implementation, reflecting the realities of digitizing community-based lending models that depend on trust, digital literacy, and close client relationships.

Early user research, supported by UNCDF, informed two key design decisions. First, while the initial plan envisioned deploying Oze’s full business management app, the partners recognized that many of its users were not yet ready to adopt a multi-function digital tool. Oze and Adehyeman therefore introduced a simplified digital loan application that supports gradual adoption while fitting existing business practices.

Second, while the original scope included both individual and group lending, early testing showed that group lending is more complex to digitize because it relies heavily on social relationships, trust mechanisms, and informal coordination among borrowers. The partners therefore focused first on individual lending, allowing them to test the technology, learn from live operations, and build confidence before extending digital tools to more complex group-based products in the future.

When digital tools complement human judgment

The partnership has now moved from design to live testing. Under a two-year rollout plan from 2026 to 2027, Adehyeman plans to provide GHS 30 million (approximately USD 2.3 million) in loans to around 1,500 MSMEs through Oze’s digital lending platform.

By combining trusted local lending relationships with digital credit assessment, the model enables the bank to lend at a scale that was previously not possible, expanding access to formal finance for small businesses that have long operated beyond the reach of traditional lending systems.

Early outcomes suggest that digital tools are most effective when they complement, rather than replace human judgment. Local knowledge and trusted relationships remain central to lending decisions, while technology reduces administrative burdens and improves consistency.

By reducing early-stage risk and supporting coordination during live testing, UNCDF’s catalytic role enabled partners to move from concept to proof of viability. The result is a digital lending model that shows promise as both replicable and scalable across informal MSME markets, while preserving the relationship-based foundations that underpin community lending models.

UNCDF personel reviewing a digital loan product with a small business owner in Darkuman (center), actively gathering feedback on his user experience. Photo: Mio Yuki, UNCDF.

A regular group meeting where the loan officer conducts the weekly loan repayment collection. Payments are recorded in both the officer’s records and the clients’ digital passbooks to ensure proper documentation. Photo: Kelvin Colman and Kwabena Opoku.