The International Finance Corporation (IFC) Ghana Warehouse Receipt System (WRS) Project in collaboration with the Ghana Commodity Exchange (GCX) on Thursday, December 1, launched the warehouse receipt financing product with Savings and Loans Companies.
The warehouse receipt financing product has been launched with four (4) Savings and Loans Companies including Sinapi Aba, Opportunity International, Adehyeman, and Letshego.
The IFC Ghana WRS project is being implemented in nine regions in the grains value chain of the country with financial support from Switzerland’s State Secretariat for Economic Affairs (SECO).
It is a technical assistance and advisory services project aimed at setting up a well-functioning and regulated WRS that is expected to facilitate increased access to credit to smallholder farmers and the supply chain, access to structured markets, and professional warehousing to reduce post-harvest storage losses.
This project also aims to strengthen the key elements of WRS for the successful operations of the GCX.
Speaking to journalists on the sidelines of the launch ceremony, Mr. Robert Owoo, the Chief Operating Officer of the Ghana Commodity Exchange emphasised that through the Warehouse Receipt System project, farmers will have the chance to store their produce, access finance whilst waiting for the price of their produce to appreciate before selling.
Explaining how the arrangements work, he said receipts issued by a warehouse operator serve as evidence that specified commodities with stated quantity and quality have been deposited at particular locations by a named depositor(s).
Whilst the warehouse operator holds the stored commodity in a certified warehouse approved by the Ghana Standard Authority and Securities and Exchange Commission, the depositor can use the receipts to access funds from any of the participating financial institutions.
Appreciating the support from IFC and SECO, Mr. Robert Owoo called for deepened collaboration to make the project better.
“The IFC and SECO have been supporting us since day one. This is very important to us….We need to work hard to ensure that access to finance is made solid.
“The work we are doing is very improving to the Ghana Commodity Exchange. We have to work together. That is very important,” Mr. Owoo said while adding, “Let’s identify with the farmers if we want to make this successful.”
On his part, Justice Sagoe, Head of MSME Lending & Deposits Mobilisation at Letshego Savings and Loans noted that his outfit is elated to be working with the Ghana Commodity Exchange as well as all the other partners.
In a plea, he called for access to capital to ensure funds given to farmers come with smaller interest rates.
“As a business, we are committed to this business and we look forward to doing more by increasing our commitment.
“I believe that as a country we need to pay more attention to our farmers…We are in to do all we can to improve the lives of farmers,” Justice Sagoe indicated.
Having raised concern about a number of challenges facing farmers including long distances to access the various warehouses from the farming communities and the bad state of roads, he appealed to the government to step in and help solve the problems.
Joining the ceremony via Zoom from Wenchi, Kennedy Owusu Poku who is an aggregator who has benefited from the project said it has really helped him.
He said that he has no doubt that if smallholder farmers capitlise on the opportunities, their lives will change.
“The money I got from Letshego helped me to mobilise and aggregated more grains. I still have my grains in the GCX warehouse and I planned to sell them in the next two weeks.
“I am highly impressed with how Letshego handled the entire transaction and I intend to build on this relationship with them in the subsequent years.
“I’m optimistic that the Warehouse Receipt System Project is the best,” Kennedy Owusu Poku intimated.
The Director-General of the Securities and Exchange Commission (SEC), Rev. Ogarmey Tetteh in a statement read on his behalf at the launch commended the partners for coming on board to delve into an area “that a lot of people are skeptical about.”
More about the IFC:
IFC is a sister organization of the World Bank and a member of the World Bank Group. It is the largest global development institution focused on the private sector in emerging markets. IFC also works with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world.
In the 2018 fiscal year, IFC delivered more than US$23 billion in long-term financing for developing countries.
For more information, visit www.ifc.org.