…with 10% loan allocation
Fidelity Bank has allocated 10 percent of its loan portfolio to agriculture – more than three times the industry average – in a move geared toward bolstering the sector, especially, against looming climate threats.
Recent data from PwC’s 2024 Banking Survey on 20 of the 23 banks in the country indicate that loans to the Agriculture, Forestry and Fishing sectors decreased from 3.8 percent to 3.2 percent of total bank lending in 2023. With a ten percent allocation by the bank, Fidelity significantly exceeds the industry average.
Speaking at the 13th Ghana Economic Forum (GEF), Julian Opuni, Managing Director-Fidelity Bank, highlighted the bank’s deliberate strategy to support the sector that contributes 21 percent to the nation’s Gross Domestic Product (GDP) and employs nearly 30 percent of its workforce.
“We have allocated a significant portion, 10 percent of our loan portfolio, specifically to the agricultural sector,” he stated, bucking the trend in a market where agricultural lending has been declining.
Mr. Opuni emphasised the urgency of action in the face of climate change, citing UN projections that across the globe mean temperatures could rise by 1.5°C to 5.2°C by 2090.
“This is not just about a few more hot days or heavier rain, it’s about the potential displacement of thousands of people and loss of livelihoods,” he warned.
The bank’s commitment comes as the agricultural sector continues to face significant challenges. Despite providing the bulk of the country’s food consumption, the industry is grappling with effects of climate change – including unpredictable rainfall patterns and rising sea levels.
“Sea levels are expected to increase by 34.5 cm by 2090,” Opuni noted, highlighting the potential impact on coastal communities and fisheries. For context, global sea levels rose a little by over 10cm between 1993 and 2024.
To spur innovation in the sector, Fidelity Bank has launched the GreenTech Innovation Challenge (GTIC) 2024 – offering over GH¢1million in grant funding. The challenge aims to support solutions at various stages, from ideation to commercialisation.
“We received 197 applications for the Fidelity GTIC and 40% of applicants are below 25 years of age. The highest percentage of applications focused on climate-smart agricultural solutions,” the Fidelity Bank MD revealed, highlighting the youth’s engagement in agricultural innovation.
The GTIC is structured into three tiers: Ideation, Scale Up and Commercialisation. This approach aims to nurture innovations from concept to market-ready products, addressing various challenges within the agricultural value chain.
The bank plans to announce winners of the GTIC at a sustainability conference later this month.
In addition to the GTIC, Fidelity Bank has expanded its Young Entrepreneurs Fund (FYEF) which provides both financial and non-financial support to youth-centric businesses, particularly those in agriculture.
Mr. Opuni called for greater collaboration between the private sector, government and international organisations to address these challenges.
“The siloed approach, whereby each entity focuses solely on its success, must give way to a more integrated strategy,” he urged.
The bank’s initiatives are coming at a time when there are growing concerns about the youth exodus from Ghana.
“By working together – government, private sector and citizens – we can unlock new opportunities in agriculture, mitigate the impact of climate change and ensure sustainable food security for future generations,” Mr. Opuni added.
