ADB to extend 50% of loan portfolio to agribusinesses
The Agriculture Development Bank (ADB) is implementing measures that will help the bank to increase the share of agribusiness in its total loan portfolio from 28 per cent to 50 per cent by 2022, the Managing Director, Dr John Kofi Mensah, has said.
He added that the measures, when fully implemented, would help propel the bank to achieve its core objective of positioning agribusiness as a springboard for national development.
Dr Mensah expressed the bank’s commitment to agribusiness to shareholders and directors at the 33rd Annual General Meeting (AGM) of the bank which was held virtually via the bank’s official website in Accra last Wednesday.
The virtual AGM was in compliance with regulations set out for listed companies on the Ghana Stock Exchange (GSE) in accordance with the coronavirus disease (COVID-19) safety protocols.
Collaboration
Dr Mensah said last year the bank continued to collaborate with the government to implement policies such as the Planting for Food and Jobs (PFJ), Rearing for Food and Jobs (RFJ), Planting for Export and Rural Development (PERD) and the One-District, One-Factory (1D1F) initiative.
“There is a renewed collaboration with the government mainly through the Ministry of Food and Agriculture to enhance support towards the implementation of valuable projects and programmes,” he said.
As part of that collaboration, the MD said, the bank had committed about GH¢100 million to support the purchase of fertilisers and certified seeds under the PFJ.
Again, he said, the bank supported the National Food Buffer Stock Company Ltd with an amount of GH¢70 million to purchase grains produced under the PFJ last year.
“This support provided a market for farm produce and thus encouraged farmers to produce more under the 2020 programme,” he said.
Dr Mensah added that as part of efforts to position the bank as an enabler for the development of Agribusiness, in 2019, the bank initiated the process of being accredited to the Green Climate Fund, an international financial mechanism under the United Nations Framework Convention on Climate Change (UNFCCC).
“The accreditation would enable the bank to have access to UNFCCC funds at low interest rates,” he said.
Digitisation
In response to the sharp demand for digital banking products and services, Dr Mensah said the bank’s agenda of being a major player in the digital banking space was on course with the promotion of a cash lite policy.
“We have upgraded and introduced new E-business products to our array of products and through these enhancements customers have more channels for seamless business-to-business, business-to-person and person-to-person payments,” he said.
Dr Mensah hinted that the bank would this year complete the migration from issuing a Magnetic Stripe cards to a much more secure chip and pin cards to its clients as part of the bank’s propriety cards and ensure the enhancement of its Mobile App.
No dividend
Meanwhile, the Board Chairman of the bank, Mr Alex Bernasko, told shareholders that there would be no payment of dividend for the 2019 financial year although the bank recorded a profit of GH¢14.8 million in 2019, compared to GH¢5.9 million in 2018.
He said the decision was as a result of a negative income surplus of GH¢188.8 million on its balance sheet since 2016.
Mr Bernasko explained that the decision was in fulfilment of regulatory requirements by the Bank of Ghana (BoG) that required the bank to write off the accumulating operating losses before declaring dividends.
“The bank has made modest profits after tax since the 2017 financial year. Indeed, the financial performance is steadily improving and getting better but members should note ,however, that as at the end of December 31, 2016, the bank had a negative income surplus of GH¢188.8 million and regulation requires the bank to completely write-off accumulated operating losses from its normal operations before it pay declare dividends,” he said.