Farmers push for 20% of bank loans

Farmer-based organisations (FBOs) in the country are lobbying Government to, as a matter of policy, impress upon banks to dish out 20% of their loan portfolios to the agric sector.

“It should be one of the fundamental rules. I know the banks will grumble for now, but over time they will accept it,” Edward Kareweh, Deputy General Secretary of the General Agricultural Workers Union (GAWU) of the Trades Union Congress told the B&FT.

A memorandum to this effect has been sent to the Ministry of Agriculture, and it is endorsed by the Ghana Federation of Agricultural Producers, the Peasant Farmers Association, the Ghana Trade and Livelihoods Coalition as well as Action Aid Ghana, Oxfam and SEND Ghana.

It is very clear that Government alone cannot fund agriculture in Ghana, Edward Kareweh said, adding that since every sector thrives on policy, such a requirement on banks would go a long way to ensure sustainability in agricultural financing.

“Sustainability of agricultural financing would have to be looked at from another angle, and that is why we are proposing that banks should devote 20% of their loan portfolio to financing agriculture as a matter of policy. And I believe that within five years or a decade, even if we are not able to completely finance agriculture, we would have gone up to 80%,” he said.

“We want this country to be a country of producers, not a country of consumers that is importing almost everything,’’ he added.

Farmers, like many small-scale business people, consider lack of credit as one of the major barriers to growth as banks do not find the sector attractive enough.

High interest rates have also made going for loans from banks a no-go-area for many smallholder farmers.

Government has recently expanded the Export Development Fund to include agriculture, but here again smallholders complain that the fund focuses too much on the cash-crop sector to the neglect of those in the food crops sector.

“There should be a clear indication of percentage of the fund targetting smallholder farmers. FBOs apexes could be involved to provide data to support in the disbursement,” the farmers wrote in their memorandum.