GIRSAL, DBG train financial institutions in agric financing


The Ghana Incentive-Based Risk Sharing System for Agricultural Lending (GIRSAL) has partnered with Development Bank Ghana to deliver Cohort 7 of the GIRSAL Agriculture and Agribusiness Lending Course.

The 4-day training session was attended by 55 participants from 12 financial institutions in Accra.

The training programme was designed to provide the requisite knowledge in agriculture, its value chains, value chain financing, risks and mitigation measures to strengthen the capacity of financial institution staff in assessing loan applications from agribusinesses, hence helping to reduce the risk associated with lending to farmers and agribusinesses.

In an interview with the Chief Executive Officer of GIRSAL, Kwesi Korboe, he noted that lending to the Ghanaian agricultural sector has generally been low, compared to other sectors. This, he said, has been attributed to the high risk associated with the sector.

He explained that GIRSAL introduced the training programme to extend increased finance to the agriculture sector for export potential, for food security and to reduce the imports of food commodities coming to the country. He said the training is carried out with the idea of enhancing the knowledge of financial institutions’ staff to enable them better-assess projects to eventually help reduce Non-Performing Loans within the agriculture sector.

“We are also planning a specialised training programme to reach out to directors of financial institutions so they have a better understanding of how to structure loans, why lending to the agricultural sector is safe, and the kind of risk mitigations that are there. This is all about a mindset change. While we are working on practicalities of the issue, we also make sure they make informed decisions,” said Mr. Korboe.

He said that GIRSAL issues credit guarantees to offer the banks some level of reassurance, so that in the unlikely event that a loan goes bad they are able to get some money to quickly help reduce their exposure.

“We have also moved into advocacy, where we look at the agricultural space in its entirety in terms of risk and see how we can minimise risk by creating a conducive environment,” he added.

Mr. Kwesi Korboe noted that the course is relevant and has been effective in demystifying the agriculture sector and countering the prevailing perception that the sector is high-risk one.

Touching on the partnership programme, the CEO of Development Bank Ghana, Kwamina Duker, said problems facing the economy are complex ones and can only be solved through partnerships by bringing diverse skills together, collaborating and connecting for betterment of the nation.

He noted that agriculture is one of the key sectors which need to be developed, but lamented that: “Only 4% of bank loans currently go to the agricultural sector, which is a big shame. So in order to resolve this, we need to bring in the best subject-matter experts; and that is why we are working together with GIRSAL. We need to partner in order to understand the value chains, and look at the pain-points and market failures within those value chains that we can help remedy.”

Mr. Duker revealed that one of DBG’s key mandates is to bring in long-term financing and work with partners to help manage the whole ecosystem.

“Now that we are getting the banks working together with us and GIRSAL, we are putting together products and policies which will help the sector and use our long-term financing to amplify the liquidity that the banks have been providing,” he concluded.

GIRSAL introduced the Agriculture and Agribusiness Lending Course for Financial Institutions during 2020 in collaboration with the National Banking College. The course is part of GIRSAL’s technical assistance facility and is expected to help stimulate increased lending to the agricultural sector.

Currently, Development Bank Ghana (DBG) and GIRSAL are co-funding three (3) additional training cohorts between August and December 2022. The two-module course covers Ghana’s agribusiness environment, value chains, agriculture insurance and agricultural loan appraisal techniques. It is targetted at agriculture desk officers, relationship managers, credit risk officers, credit analysts and other middle-level staff of financial institutions. The course also includes a practical field visit.

Both organisations signed an MoU in March 2022 to provide capacity-building and innovative interventions to improve agriculture financing in Ghana.

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