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24.10.2008 General News

Framework for Agricultural finance underway

By Stephen Odoi Larbi - Ghanaian Chronicle

Lack of access to finance has been the bane to many businesses in the country, especially those in the agricultural sector. This has resulted in the sector losing so many hands that flock to the cities to seek greener pastures.

So many factors have been attributed to this situation, with the key one being the fact that the services of the traditional commercial banks have not been well suited to address the needs of farmers and other players in the agricultural sector.

“It has been observed that the share of credit and other financial services going to agriculture and the rural population still remain very low. This has been attributed to the fact that the services of the traditional Commercial banks have been well suited to the needs and risk profiles of farmers and operators along the agriculture value chains”, noted Mr. Kobina Amoah, Director at the Ministry of Finance and Economic Planning, at the launch of EZI Savings and Loans Company in Accra yesterday.

According to him, government was concerned with this phenomenon and has instituted a strategic framework and action plan called Agricultural Finance Strategy and Action Plan (AFSAP) that would be used as a foundation for the development of new financial products that would be suitable for the country.

He said government's aim at instituting this initiative falls in line with its policy of using

Microfinance as a key instrument to tackle poverty to achieve the Millennium Development Goals (MDGs).

According to him, the government would continue to pursue good policies that would witness the realization of the agricultural sector attaining greater heights.

He said one key area to achieve this aim is the provision of microfinance as a strategy for wealth creation and poverty reduction.

According to him, the proliferation of microfinance institutions (Rural and Community Banks) in all corners of the country was to mobilize savings/deposits for lending to Micro, Small and Medium Enterprises (MSMEs), an initiative that he said would go a long way to address the needs of farmers in the country.