Known as Agriculture Financing Initiative (AgirFI) Country Window, the fund, which will run for the next 10 years, will focus mainly on farmers in the mango, rice, groundnuts, sorghum, soya bean, cashew and vegetables value chain.

The beneficiary regions are Upper West, Upper East, Northern, North East and Savannah.

The facility is aimed at supporting the development of sustainable and inclusive agriculture value chains with focus on smallholders to expand their business and improve on their livelihoods.

It is being funded by the European Development Financial Institution (EDIF) Company Management, in collaboration with Sinapi Aba Savings (SASL) and Loans in the country. 

The programme had already been piloted in the beneficiary regions in the last two years to test its feasibility.

Rationale 

The Fund Manager, Lionel Dieu, said the EDFI decided to target the northern parts of the country because it had realised that many farmers and businesses in that part of the country hardly got support from financial institutions.

He said the objective was, therefore, to attract other financial firms to extend their services to the people to improve on their well-being.

The manager said the fund would be engaging two local firms in addition to SASL to disburse the facility to the farmers.

“Basically, it is to address the financing gap for long-term smallholder financing in northern Ghana,” he added.

During the trial stages, over 25,000 smallholder farmers benefited from the facility, while more than 24,000 hectares of farm were cultivated.

Mr Dieu said 538 full-time jobs were also created within the period and explained that the successful implementation of the pilot project was the basis for the upscale of the fund.

Appeal 

The Upper West Regional Coordinating Director, Peter Maala, entreated the managers to make the interest rate affordable to enable farmers to access the fund.

He said if the interest on the loans were what was pertaining in the commercial bank, the likelihood that farmers would not subscribe to it was high.

Mr Maala expressed appreciation to the EU and said the initiative had come at the appropriate time to help farmers with credit financing.

He said due to the risky nature of agriculture, getting access to credit was a big challenge to farmers as most financial institutions did not want to extend funds to them, adding “we are, therefore, happy that this is coming to fill a gap in the system”.

Significance

The Deputy Ambassador of EU Delegation in Ghana, Jonas Claes, underscored the important role smallholder farmers play in the economy of the country.

He described them as the backbone of the country’s agricultural sector as “they do not only provide food, but also employment, and are central to the social fabric of the community”.

Mr Claes said that the EU was aware of the challenges farmers were facing in accessing loans, hence the reason behind their support.

“AgriFI is a unique loan system for farmers, unlike grants which may be a one-time intervention, loans create a cycle of investment and returns, fostering a culture of financial responsibility and sustainability,” he said.

Mr Claes said the EU was committed to supporting a more sustainable approach to agricultural financing.