Farmers in the Ashanti Region have welcomed an initiative by the International Finance Corporation (IFC), a member of the World Bank Group, aimed at providing reliable financial assistance to small-holder farmers, ABC News can report.
Known as the Ghana Warehouse Receipt Financing (WRS), the initiative seeks to reduce the challenges suffered by farmers in their quest to secure credit facilities to grow their businesses and to promote food security.
The warehouse receipt is a document of title given to farmers after they store their produce in a certified warehouse. The farmers are then able to use the warehouse receipt as collateral to secure financial assistance from the Ghana Warehouse Receipt System (WRS) partner banks.
The enterprise, which was launched in Kumasi in the Ashanti Region, is a collaboration between the IFC, the ARB Apex Bank, and the Ghana Commodity Exchange (GCX).
Small-holder farmers, who attended the event welcomed the initiative, expressing delight the move will end their burden of struggling to secure reliable funding avenues to expand their businesses.
They acknowledged that the Warehouse Receipt Financing initiative will enable them to produce more without selling their produce at distress prices due to a lack of funds for production.
A farmer from Wa in the Upper West Region, Hajia Abdulai Maimuna, for instance, observed that access to credit from the Warehouse Receipt Financing present real opportunity for her and other colleague farmers to improve their livelihoods through increased production.
She emphasized that “this will address one of our biggest challenges and when we secure loans from the banks after storing our grains at the warehouse, we will use the funds to reinvest in our farming business or other activities for extra income.”
Mr. Frederick Adomako, another farmer from Wenchi in the Bono East Region, also noted that the loan support will help him and other farmers to purchase agricultural inputs for their farming activities without necessarily selling off their grains at very low prices.
Speaking at the launch, the Country Lead for the IFC Ghana WRS Project, Mrs. Doreen Oppan, stressed that the IFC would continue to jointly facilitate technical support, capacity development, and education activities for the Rural and Community Banks and their network of farmers.
She added that “we will also aim at closer collaborations with key stakeholders to create a more robust legal and policy environment and also strengthen our work with state actors such as the Ghana Standards Authority, for the creation of a trusted regulatory entity for warehouse operations backed by the law.”
Mrs. Oppan said it is the expectation of IFC that the lives of farmers would be positively impacted, postharvest loses would be minimized, trading would be more efficient and, particularly, the commitment by banks to finance warehouse receipts would deepen as it provides a trusted mechanism to finance the agriculture sector thereby strengthening the ecosystem for a successful Ghana Commodity Exchange.
The IFC Ghana WRS Project is being implemented in nine regions of the country with financial support from the Swiss Secretariat for Economic Affairs (SECO). The project is a technical assistance and advisory services project aimed at setting up a well-functioning regulated WRS that is expected to facilitate increased access to credit, to farmers and the supply chain, linkage to structured markets and reduction in post-harvest storage loses.