Accra, GNA - Procredit Savings and Loans Company Limited, Ghana, a member of the Procredit group, has earmarked 50 per cent of its total loan portfolio to support the agricultural sector in the next five years.
Ms Edwige Takassi, Managing Director of Procredit Ghana, who announced the package at a press conference, said currently Procredit Agro loan stood at 1.5 million Ghana cedis, representing eight per cent of its total loan portfolio.
She said even though the current Procredit agro loan was its single largest loan portfolio, it was still not enough to meet the growing need for credit in agriculture.
"Procredit projects that within the next five years, agro loans would account for at least 50 per cent of the institution's loan portfolio," she said.
She explained that if within the next five years Procredit loan portfolio should grow to 500 million Ghana cedis, 250 million Ghana cedis would go to farmers, food processors and other stakeholders in agriculture.
"Procredit is determined to become the leading provider of financial services to the agricultural sector," she said. Ms Takassi noted that even though the agricultural sector was the backbone of the Ghanaian economy and employed over 60 per cent of the country's workforce, the sector was hugely underserved by banks and financial institutions, probably due to the inherent risk in the sector. However, she said painstaking research by Procredit team of experts indicated that contrary to the notion that the sector was bedevilled with inherent risk, in the long term the sector was less risky and beneficial.
"Our agro loans would target farmers and people in agricultural related businesses who constitute a very significant part of the sector, providing jobs and food for our people and yet do not have access to credit because banks usually require expensive business plans and huge collaterals from them," she said. Ms Takassi said whatever property a farmer had would be enough collateral for a Procredit agro loan, adding that the only additional requirement would be for the farmer to have a business orientation for his work.
"The minimum loan amount is 50 Ghana cedis - loan amount will vary for each individual farmer depending on the size and value of what the farmer already has," she said.
She said the decision to support the agriculture sector was as a social responsibility rather than of profit motive, saying that the interest rate on Procredit agro loan was less than the normal interest rate on the Procredit's business loans and could be reviewed with increase in the loan for each individual.
Ms Takasi assured other customers of Procredit that, the agro loans would not overshadow commitment to other services such as housing improvement loans, deposits, banking products and services. Mr Dominic Donkoh, Head of Credit Department of Procredit, said Procredit was negotiating for land near Nsawam for farming, to serve as a resource centre where farmers would be trained in best farming practices to maximize their profits.
He said, already staff of Procredit had been dispatched to farming communities to assist subsistence and small scale farmers and food processors to organize themselves to access Procredit agro loans for expansion. Currently, ProCredit Ghana has a total of five Agro centers located at its Abeka Lapaz, Suame, Nkawkaw, Sunyani and Takoradi Branches. 10 Sept. 08
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