New funding scheme for farmers in the offing

mofa minister

Farmers will soon be able to access funds from a special scheme that will address the long-standing challenge of accessing loans for their work.

Under a proposed plan by the Ministry of Food and Agriculture, lending risk will be shared between potential beneficiaries and the central bank.

Sector Minister, Mohammed Muniru Limuna, explains the Bank of Ghana will serve as guarantor for farmers in the yet to be launched scheme.
He says the bank will absorb 80 per cent of debt in the event of losses caused by natural disaster.

Alhaji Limuna who was recently addressing farmer groups at the launch of the Ghana Agricultural Sector Investment Programme in Kumasi said some banks were afraid to offer financial assistance to farmers.
“The risk associated with agriculture are so high that banks are afraid to lend money to farmers.

The central bank will take it up and guarantee for the farmers by insuring certain natural disaster on behalf of farmers”.
Alhaji Limuna indicates measures will be put in place to check abuse of the systems.

“We will make inquiries into every claim before payment is made. Some people will burn their farm after harvesting to escape payment”, he revealed.
Meanwhile, 2014 National Best Farmer, George Asamoah Amankwaa, says it is nearly impossible to secure funds for farming due to the cumbersome requirements set out by the financial institutions.

According to him, aside the need for collateral which should be in forty per cent excess of the required amount, some financial institutions require farmers to pay four percent of the amount as fees for processing.

Mr. Amankwaa says repayment of loans contracted has become a difficulty due to natural disasters like bush fires and inconsistent weather conditions.
He fears refusal to address the situation will lead to farmers channeling their investments into other businesses.
He is upbeat about the impact of the scheme on food security in the country

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