Farmers appeal to financial institutions for flexible loans
Peasant farmers have appealed to financial institutions to give them flexible loans to enable them to procure machinery and fertiliser to increase their yields.
They said high interest rates on loans and the failure by many financial institutions to offer loans to them had denied many farmers the opportunity to engage in commercial farming.
The President of the Peasant Farmers Association of Ghana (PFAG), Mr Abdul-Rahman Mohammed, made the call during a roundtable by the farmers and financial institutions in Accra yesterday.
The meeting discussed how the financial institutions could provide credit facilities for the farmers.
The farmers were also educated on how to position themselves to qualify for such credit.
Limited access to loans
Mr Mohammed mentioned the lack of credit to purchase inputs, expenses on land preparation, labour, harvesting and storage of produce as some of the challenges facing farmers.
He said even though fertiliser was subsidised, it was still beyond the reach of many farmers to buy a bag at GH¢89.
“These challenges make it difficult for our farmers to produce at full capacity. It is also a fact that getting a bank loan as a farmer is extremely difficult due to collateral requirements, payment schedules and high interest rates,” he added.
Mr Mohammed appealed to the financial institutions to help farmers with credit facilities “because it is the only way we can help Ghana grow”.
He called on the government to ensure the timely delivery of subsidised fertiliser by doing away with middlemen.
The Programme Coordinator of the PFAG, Ms Victoria Adongo, said limited access to formal credit had limited the capacity of smallholder farmers to invest in new technologies, as well as the inputs needed to increase their yields.
She noted that the myriad of risks and challenges, including the seasonal nature of farming, irregular cash flow, floods, plant diseases, high transaction cost and the absence of collateral, deterred financial institutions from extending loans to farmers.
Ms Adongo said there was a gradual shift that might lead to reducing some of the risks, adding, “There are great prospects for smallholder farmers as population increases and there is growing awareness of and demand for home-grown staples.”
Besides, she said, smallholder farmers were moving away from subsistence to commercial farming and agri-business.
Financial institutions
In separate interventions, representatives of the financial institutions at the roundtable charged farmers to package themselves well to endear themselves to the financial institutions.
They said the banks had loan facilities but they would not give out loans to farmers who did not have any records of cash flow or bank transactions.
The Chief Executive Officer of the Private Enterprises Federation (PEF), Nana Osei Bonsu, who chaired the function, urged farmers to move away from dependence on government loans and explore other sources of funding to increase their production.
