Farmers in the five regions of northern Ghana would soon access credit following the launch of a EUR10 million agricultural financing mechanism for farmers in Ghana.
The European Union (EU) delegation in Ghana and the European Development Financial Institution (EDFI) Management Company launched the scheme dubbed: “Agriculture Financing Initiative (AgriFI) Ghana Country Window” to help ease farmers’ challenge in accessing credit.
It was aimed at supporting the development of sustainable and inclusive agricultural value chains, focused on improving the livelihoods of smallholder farmers in the cashew, groundnut, mango, rice, sorghum, soybean and vegetable value chain.
Speaking at the launch of the scheme in Wa, Mr Jonas Claes, the EU Deputy Ambassador to Ghana, stated that the initiative was focused on the northern sector “because the needs are the greatest here” and it would help melt the farmers’ stumbling block of financing.
He explained that the AgriFI Ghana Country Window was a key EU supported system to strengthen the agriculture sector of Ghana, which focused mainly on financing for smallholder farmers under the European Union – Ghana Agriculture Programme (EUGAP).
The AgriFI was funded by the EU and managed by EDFI Management Company and farmers could have access to the loan under the mechanism through selected institutions, including the Sinapi Aba Savings and Loans.
Mr Claes observed that access to finance was a challenge farmers in the country faced, particularly in northern Ghana, which hindered their ability to make investments in modern farming techniques.
He indicated that the EU was, therefore, committed to supporting a more sustainable approach to agricultural financing, which saw the EU invest EUR144 million (GH¢2.5 billion) in the agriculture sector in Ghana since 2021 not only in financing but also in capacity building, infrastructure and matching grants among others.
“Grants play a vital role in addressing financing challenges, but they are not always sufficient or sustainable. This is where the AgriFI Ghana Country Window enters in the picture.
“AgriFI is a unique loan system for farmers. These loans help to develop the activities of key agriculture stakeholders, such as microfinance institutions or aggregators.
By complementing grants with loans, we create a more holistic and sustainable approach to agricultural development and financing”, Mr Claes explained.
Mr Lionel Dieu, the AgriFI Fund Manager, announced that the EUR10 million loan product would be disbursed over a period of twelve years to companies and entrepreneurs that expressed interest and met the eligibility criteria.
He explained that the intervention was expected to reach about 12,000 smallholder farmers in Ghana, particularly the northern sector.
Mr Dieu said for an enterprise to be qualified, it must have been in operation for at least three years with a record of accomplishment and capacity to do healthy financial, social, and environmental reporting.
Mr Peter Maala, the Chief Director at the Upper West Regional Coordinating Council, thanked the EU and EDFI Management Company for their intervention for farmers in the region as access to credit facilities was difficult for them.
He indicated that some farmers shied away from accessing loans from commercial banks due to high interest rates on loans coupled with the substantial risk in farming.
Mr Maala, therefore, entreated the EU and its partners to reduce the interest rate on the loan to make it accessible to farmers or else its purpose would be defeated.
Sinapi Aba Savings and Loans (SASL) was one of the selected institutions to disburse the loan to farmers from its six branches across northern Ghana.
Madam Joyce Nyamekye, the Cooperate Planning Manager at the SASL, indicated that they received EUR2.5 million from the project and had since disbursed EUR1.5 million to farmers.
Madam Nyamekye, also the relationship person at SASL, explained that their target was smallholder farmers with some of them receiving up to GHȻ10,000.00 to support their farming activities.
Representatives from the Regional Department of Agriculture, commercial and smallholder farmers, Sommalife and Demeter among others were at the launch.
Source: GNA
