Remarks by CEO of MiDA at Ceremony for the Accreditation of Financial Institutions in the Agricultural Credit Programme (ACP)

The ACP is part of MiDA’s Credit Activity which seeks the Improvement of Credit Services for On-Farm and Value Chain Investments.

The Credit Activity recognises that financial service providers are few and far between in most of the districts in the Intervention Zones and have limited abilities to expand rapidly. Only one commercial bank, the Agriculture Development Bank, is meaningfully engaged in making loans to agricultural clients in the Northern Zone and the Afram Basin Zone. Although there almost 40 privately-owned rural banks and seven financial NGOs that serve rural clients in the Intervention Zones, their resources and capacity are very limited. The Credit Activity will therefore, support the other MCA Ghana Project Activities under the Agriculture Project by facilitating access to credit in the Intervention Zones and assisting the banks to improve their ability to assess, grant and manage agriculture loans.

Specifically, the MCA  Ghana Programme will support the following

-Provision of funds for banks, financial NGOs and other eligible financial intermediaries for on-lending to borrowers in the agricultural sector in the Intervention Zones under the US$40.7 million revolving Agricultural Credit Programme Fund to be resident within Bank of Ghana.

-Grant funds to PFIs for the establishment of new office locations, branches or loan production offices, in all the Intervention Zones, with a special preference given to the Northern Zone and the Afram Basin Zone for banks, selected based on eligibility criteria adopted by MiDA with the approval of MCC to provide access to credit and financial services in unserved areas.

-Training for rural banks and financial NGOs on credit and management skills consisting of classroom and on-site training throughout the Compact Term

-Establishment of pilot programs intended to speed the flow of credit along the agriculture value chain, such as voucher programs with retail input providers.

STATUS OF IMPLEMENTATION OF MCA ACTIVITIES
MiDA has under its Commercialization of Agric Project, procured a Central Management Consultant (CMC) to supervise the training of Farmer Based Organizations (FBOs) or Groups and SMEs involved in production (on-farm activities), post-harvest activities or agri-businesses (such as processing, storage, transportation, marketing, etc) and service providers (input suppliers such as agro-chemical dealers and tractor service providers). The training will focus on crop production, business management skills and environmental awareness.

In addition, MiDA is in the process of procuring the ACP Consultant (ACPC) under the Credit Activity, whose role would include, among others, providing:

-Technical Advisory Services regarding Agricultural Finance; and,

-Capacity Building (Agric Credit Product Development and Training) for PFI staff.

For now, though, MCA funding is being disbursed through the following process:

-Capacity Building (Agric Credit Product Development and Training) for PFI staff

-CredAll requests for Credit are to be made through an Accredited Financial Institutionit requests are to be approved by the PFIs using their approved credit appraisal procedures;

-For on-farm activities, credit will be available after training of various beneficiaries. Prior to this, Credit is available for EurepGap or Global-Gap-certified farmers who should also have a valid permit from Environmental Protection Agency (EPA).

-For Post Harvest Value Chain and Input Supply/Services in the Value Chain, credit is available only for registered businesses or SMEs.

All these measures, at this stage, are aimed at creating a mutually beneficial relationship between the banks on one hand, and agricultural value chain operators involved in on-farm activities, processing, storage, transportation and marketing especially in high value cash crops and food crops in our Intervention Zones.

Ladies and Gentlemen, I thank you for joining us for this important step in the process of arranging resources for farmers and other operators in the agricultural value chain to boost economic growth in Ghana through the modernization and commercialization of the agricultural sector.