Agribusinesses urged to form groups to source funds
The Secretary General of the Ghana Agricultural Producers and Trader’s Organisation (GAPTO), Alhaji Haruna Agesheka, has advised businesses in the agricultural sector to form groups to enable them to apply for funds from financial institutions.
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That, he said, would help reduce the challenge of access to, and cost of credit, which had been the bane of businesses in the sector.
He explained that farmer-based organisations such as GAPTO could be formed to enable farmers to become more creditworthy and presentable to the financial institutions, which would then make borrowing cheaper for the farmers.
“The formation of a credit union by GAPTO members may be a step in the right direction. A typical example of well-structured credit union is Credit Agricole, which has its headquarters in France,” Mr Agesheka said at a stakeholder workshop in Accra.
The workshop was organised by GAPTO in collaboration with the Business Sector Advocacy Challenge (BUSAC) Fund to deliberate on how to improve funding challenges facing businesses in the agricultural sector.
It was on the theme: ‘How to improve access to funding to operators in the agricultural sector.’
Participants were representatives and leaders of small-holder farmer groups nationwide, as well as government and relevant ministries, departments and agencies (MDAs). They discussed policy recommendations and agreed on the way forward to removing barriers to accessing funding for agriculture activities.
The objectives of the training programme were to, among others, equip and support members of GAPTO in effective advocacy skills to enable them to influence the policy and action of those in the public sector.
Speaking on the need to increase funding to the farmers and agriculture sector operators, Mr Agesheka said the situation could also improve if financial institutions collaborated with government to find out how some of the risks deterring banks from lending to businesses in the agric sector could be minimised and mitigated.
Difficulty in accessing credit
Difficulty in accessing credit has been the topmost constraint restricting the development of the country’s agricultural sector. It has also made it difficult to attract the country’s youth into the sector.
This assertion is supported by the findings of the various studies undertaken by the Association of Ghana Industries Business Barometer (AGI BB), which has consistently identified difficulty in accessing credit, high cost of credit and lack of medium to long-term capital as the leading barriers to the growth of the agricultural sector.