Adehyeman, Ghana Commodity Exchange sign agreement to support farmers
Savings and Loans entity Adehyeman Savings and Loans Ltd (Adehyeman) has partnered with Ghana Commodity Exchange (GCX) to offer commodity-backed loans to farmers and aggregators to cushion them.
The partnership known as the Warehouse Receipt Financing Scheme allows using agricultural commodities as collateral to secure loans. The mechanism sees interested farmers who store their commodities at a certified independent warehouse, secure the loan and pay back after selling the farm produce.
At the signing of the partnership this morning at the Africa Trade Office in Accra, the Chief Operations Officer of GCX, Mr Robert Dowuona Owoo, noted that the warehouse receipt had come at a time when smallholder farmers faced serious financial challenges as they could not access funds from the banking sector to finance their operations.
“This initiative will guarantee these farmers from incurring post-harvest losses, ensure the safety and quality of their produce and cure the last of the three main challenges which faces farmers which is access to finance,” he stated.
In a short remark after the signing ceremony, the Managing Director of Adehyeman Savings and Loans Limited, Joe Emmim, expressed gratitude to the Ghana Commodity Exchange for the opportunity and noted that the agreement would allow the farmer to use the receipts to access funds from Adehyeman.
“We are happy to offer this support to farmers in the country because we see the agricultural sector of the economy as key to ensuring food security in the country and for export to generate foreign exchange for the economy. Against this background, we must step in when others deem the sector risky and, therefore, shy away from providing the needed financial support to make the farmers realise their full potential”.
Mr Emmim said under the agreement, the warehouse receipt would serve as evidence that specified commodities with the stated quantity and quality had been deposited at a GCX warehouse. He expressed the hope that farmers would take full advantage of the opportunity and avail themselves to secure loans that offered them the peace of mind to operate.
The partnership was facilitated through technical assistance provided within the Financial Institution Resilience and Strengthening project (FIRST+) framework funded by the Mastercard Foundation and implemented by CapitalPlus Exchange. The FIRST+ project provides capacity building and technical assistance to Adehyeman SLC in the area of agricultural finance, which includes technical support in the development and operationalization of the Warehouse Receipt Loan product and its current pilot implementation in various regions.
Adehyeman Savings and Loans LTD is a regulated financial institution in Ghana. It has the legal and regulatory mandate to receive deposits and offer loans to businesses, groups and individuals. The company has its head office in Accra with branches and offices in the Greater Accra, Eastern, Ashanti, and the Central Regions of Ghana.