The Netherlands Ambassador to Ghana, Mr Ron Strikker, has made a strong case for the financial sector players to prioritise lending to the agricultural sector in their loan portfolio.
He said the financial sector was crucial to providing the investment funding required for innovation and expansion in the sector, hence the need to increase the loans disbursed to support their activities.
“I was shocked to find out that out of all the loans that banks give out in Ghana, only four per cent goes to the agriculture sector. The financial sector should be the oil to make the economy work.
“Banks should serve the farmers, not the other way around. Although the government is of the same opinion, but even for the government, it is hard to get things done. We need the financial support for the expansion and innovation that we need in the sector,” he said at the launch of HortiFresh, an initiative to help the horticultural sector in Ghana and Cote d’Ivoire.
The project is funded by the Kingdom of the Embassy of Netherlands.
Mr Strikker, therefore, called on the financial sector to prioritise the horticulture sector in their loan portfolio as the programme had identified many reliable companies with profitable business projects.
“Through HortiFresh, we want to change this figure and engage banks to start lending to the horticulture sector at reasonable conditions,” he said.
Make sector attractive
He said Horticulture, which focused on the fruits and vegetables sector, made great sense in the context of Ghana and Cote d’Ivoire, especially in a Ghana that wanted to get beyond aid.
He said the sector was attractive for the youth and women because it gave them the opportunity to start on a small scale or low investment.
“It is a way of agriculture which needs and attracts technology. It also represents high value while having a short production cycle and very important; it creates up and downstream opportunities for employment,” he said.
A Deputy Minister of Food and Agriculture, Mr George Oduro, said because the banking sector perceived farming as a high-risk area, government has therefore introduced an insurance package to help minimize the risk associated with the sector.
“The President announced last week that the Bank of Ghana has GH¢500 million as insurance incentives for farmers. This means that when a farmer takes a loan from a bank or financial institution, the BoG will register the loan facility, thereby making the banks feel safe,” he said.
He said as a result of the minimised risks, the banks would be more inclined to increase the loan because there was some level of surety.
“So now they will realise that when they give the facilities to farmers, the risk has been lowered by the insurance the BoG is going to give them. It is going to help the banks know that now when they give money to the farmers, it is safe and they will increase the loans they give to farmers,” he added.