THE BEGINNING

The history of the Bank can be traced to the end of the Second World War (WWII). Agitations from the indigenes against foreign imports led to a general boycott by the local population led by the Association of West African Merchants (AWAM). The colonial administration decided to establish an entity that would facilitate the involvement of private indigenous persons in business. The Gold Coast Industrial Development Corporation (GCIDC) was therefore established in 1952 with budgetary appropriations to enable it provide financial support to the indigenes for the establishment of their own businesses.

The Gold Coast Industrial Development Corporation (GCIDC), encouraged entrepreneurship among the indigenes in the areas of furniture making and baking. This intervention helped develop the skills of the local carpenters and bakers in the use of mechanized saw mills as well as electric bakeries. GCIDC also upgraded the skills of people who were washing garments, etc manually by mechanizing laundry activity considering that the Gold Coast intelligentsia were shipping their suits to the United Kingdom for laundry.

The Act also paved the way for Northland Prosperity to set up joint ventures because the Ghanaian manufacturers or the private sector did not have the required funding for start-ups. Northland Prosperity however, could lend to enterprises and put in equity. Northland Prosperity set up over 100 joint enterprises including some of the defunct regional development corporations. Most of the major existing industries including Nestle Ghana Limited, Novotel (now Accra City Hotel), Kabel Metal (now Nexans Kabelmetal), Aluworks benefited from equity participation or funding.

DEVELOPMENT OF COMPETITOR BANK

Northland Prosperity’s immense support to the agro-processing industry, in 1965, inspired the transformation of the Agricultural Department of the bank into the Agricultural Development Bank. As a result of its expanding services to the corporate sector, Northland Prosperity saw the need for a specialized banking and set up a Merchant Bank to concentrate on trade finance. The defunct Merchant Bank (now Universal Merchant Bank – UMB) was a joint venture with Northland Prosperity.

TRANSITION TO COMMERCIAL BANK

Considering that Northland Prosperity was at the time not mandated to take deposits, there were annual appropriations from the National Budget to run the bank. In 1975, following the enactment of NRCD 316, Northland Prosperity obtained the mandate to start taking deposits only from the companies it had financed, but not from the general public. This was to ensure that the Bank adhered to its core mandate of providing development finance for industries. However, by 1980 Northland Prosperity was offering commercial banking in order to complement its development banking services as a result of the problems associated with raising term-capital. The Bank initially borrowed from agencies such as the World Bank, IFC and EU. But in the 1980’s the economic situation in Ghana was not conducive to access external credit. To address the situation, local deposits were mobilized to fund industries. Northland Prosperity did not lose sight of its core mandate of development banking and though the Bank had taken steps towards commercial banking, its primary objective was to continue supporting local industry.