Banks Accused Of Shunning Farmers

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    Mr. Francis Osei, Head of Agricultural Financing, Stanbic Bank Ghana, has blamed the country’s banking sector for its lack of readiness in developing sustainable institutional support aimed at financing the development of agriculture in the country.
    “We need to finance agriculture more than the way we have been doing, and it is time to get back to the business of agriculture financing.
    “There is a clear mismatch which needs an urgent remedy, considering it is a sector that contributes 33.5 percent and has credit of just 5.1 percent,” he said.
    Mr. Osei, who made this disclosure in Accra, mentioned that access to timely credit for smallholder farmers, who constitute the majority in this all important enterprise, has become the bane of the sector.
    “Financing agriculture has become difficult; this is the kind of challenge Stanbic Bank is trying to correct by engaging stakeholders to try and develop an average financing that follows a sensible value-chain derived from the market and which is able to line up all the actors in the process so that everybody knows what role to play at what time in the year-long activity – from the farm right up to the market.
    “People will have to understand that if you are providing finance into agriculture, we have to move away from the smallholder approach to market, and to a farm approach.”
    He stated that Stanbic Bank will leverage on the experience of its parent bank, the Standard Bank Group in agriculture financing to assist in the roll-out of enhanced agriculture services and support systems, as well as support the work of private extension in agriculture enterprise development.
    “A hundred and forty-seven years ago, the Standard Bank Group started as an Agricultural Bank and has strong competence in financing agric; we are leveraging on that in Ghana and the rest of Africa, where we have a presence.”
    He revealed that the Bank has developed a clear strategy to finance agriculture in the country and has dedicated resources to ensure effective delivery of agriculture offerings which will develop customised banking products and introduce risk-mitigating instruments for the sector.
    It is estimated that about 40 percent of the world’s reserve agricultural land is in Africa, and therefore needs the expertise of organisations such as Stanbic Bank to turn that land into a tool to alleviate poverty and bring about food security and sustainable development on the continent, he explained.
    “The need for food is increasing, and this creates an opportunity for the financial sector to take advantage of the opportunities and develop strategies. “The World food crisis, increasing population and urbanidation as well as climatic change, are the main drivers in agricultural financing.
    “Climatic change is making things more uncertain, and weather pattern have changed where some countries are unable to realise their agricultural output,” Mr. Osei remarked.