In Ghana, Nyaaba cites barriers to farmer lending — MyJoyOnline
In Ghana, former director of the Peasant Farmers Association of Ghana Charles Nyaaba said that strict documentation and collateral requirements imposed by financial institutions limit farmers’ access to loans. This particularly affects small-scale producers who need relatively small loans for agricultural activities, MyJoyOnline reports.
Documents as an obstacle
Nyaaba spoke on September 22 at the Ecobank-JoyNews financial dialogue dedicated to green financing and inclusive growth in Ghana’s agricultural sector. He called access to finance one of the main challenges throughout the agricultural chain, from production to marketing and distribution.
According to him, the documents that financial institutions require from farmers remain a significant obstacle to obtaining credit. Nyaaba also believes that when reviewing applications, institutions do not always take into account differences between categories of farmers and their financing needs.
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The cost of collateral
Nyaaba cited his own experience of seeking financing to support farmers. According to him, under a recent arrangement, he was advised to go to the Land Commission and transfer the title to property to the bank before it would provide funds to farmers.
He said that processing the title transfer alone cost about 30,000 Ghanaian cedis. In his view, this amount can be significant for small-scale farmers, particularly if their main asset is an inherited family home.
The former association head called on lenders to review collateral and documentation requirements, as well as interest rates and loan repayment terms. According to him, financing conditions should take into account the realities of agricultural production and the needs of different categories of farmers.
