According to Kwesi Korboe, managing director of the Ghana Incentive-Based Risk-Sharing System for Agricultural Lending Project (GIRSAL), candor, transparency, and accountability are crucial components in helping farmers and agribusinesses access funding for their operations.
Financing is a key enabler for agribusinesses and farmers, but acquiring it has frequently grown more difficult over time due to a number of variables, both on the demand side (farmers) and the supply side (financial institutions).
The unwillingness to repay loans, diversion of funds and produce, bad operational and financial record-keeping, and actions by the agricultural institution or individual, among other issues, are some obstacles on the demand side.
The supply side also has its own challenges which cannot be overemphasised. They include delay in processing time; financial institutions’ lack of technical ability to assess and monitor agri credit; financial institution staff’s inability to understand the nature and structure of most agribusiness operations.
Mr. Korboe – speaking to the media on the sidelines of a Supply Chain Action Network (SCAN) meeting organised by the Centre for Applied Research and Innovation in Supply Chain-Africa (CARISCA) at the Kwame Nkrumah University of Science and Technology (KNUST) – noted that to surmount all of these challenges, both financial institutions and agribusinesses, including farmers, must be responsible in their dealings.
“The two parties – the one demanding funding and the one supplying – should all fulfil their responsibility well. Sometimes you don’t need to run to banks to raise finance, it should depend on your scale of operations.
“Report to the bankers periodically; you don’t wait till there is a calamity before you rush to the bank. It creates a bit of bad taste. Banks are in the business of lending money to farmers and businesses are also producing the crops to make money. In every relationship, everyone must accept that they will have to be transparent and work together as a team,” Mr. Korboe said.
For his part, Senior Technical Advisor for Health, John Serbe Marfo, explained the rationale for the SCAN meeting.
“For us at CARISCA, we want to listen to our stakeholders so we will pick out areas we can research into, and from an action perspective find solutions we can present. We want to go beyond publishing in journals by providing real solutions,” he said.
The meeting was on the topic ‘Supply Chain Financing: the Fintech and Traditional Banking Perspective’, held in partnership with Arizona State University (ASU) with support from the United States Agency for International Development (USAID).
The SCAN meeting is one of the avenues whereby stakeholders in the agricultural and health supply chains are brought together to brainstorm on pressing issues which seek to positively change global supply chains and impact the lives of people in Africa and beyond.