Over 250 smallholder farmers access loans with warehouse receipts
More than 250 smallholder farmers who trade on the Ghana Commodity Exchange (GCX) have used their warehouse receipts to access loans to finance their activities.
The warehouse receipts credit initiative allows farmers who trade their commodities on the exchange to get access to loans, using their warehousing receipts as collateral.
The Chief Executive Officer (CEO) of the GCX, Mrs Tucci Goka Ivowi, who was speaking at the Minister’s Press Briefing series in Accra yesterday, said prior to the establishment of the GCX, smallholder farmers’ access to credit was strained, as they did not have houses or lands to use as collateral to access loans.
“Today, with the GCX warehouse concept, when you take your commodity to the warehouse, you get a receipt, which you can take to a financial institution and get a loan for the value of your commodity that you have stored in the warehouse.
“This gives farmers the opportunity to store their commodities till prices are high and at the same time get some money for their livelihoods,” she said, adding that the ARP Apex Bank had dedicated GHȼ50 million for the initiative.
Inclusion of other crops
According to the CEO, the exchange, which started with trading in grains, would soon extend trading to cash crops such as cocoa and cashew.
“We started with agriculture — grains and food security crops— but we will soon start trading in cash and tree crops,” Mrs Ivowi said.
She said the GCX had already done an auction trade for cashew on the market, and that in a later phase, her outfit would introduce commodities such as metals, minerals and gold, in line with the country’s agenda.
“We are going step by step, commodity by commodity and warehouse by warehouse. The idea is not to rush the process but make sure that every single stage is working,” the CEO added.
Private sector participation
Mrs Ivowi said the GCX was incorporated in 2017 as a private company limited by shares, with the government as the sole shareholder because the work of the exchange was to do social good.
She, however, said the government would soon open up the GCX for private sector participation.
“We are looking to build a public/private partnership because it is a business, but at the same time we want to make sure we can improve the livelihoods of smallholder farmers, and this is where the government’s interest lies at the moment.
“We have been in discussions with organisations, which are interested, but we are going to take our time and ensure that the interest of smallholder farmers is looked after,” Mr Ivowi said, adding that the GCX had been able to encourage more youth into agriculture.
She said in spite of the challenges faced by the exchange in 2020 as a result of the COVID-19 pandemic, it had begun the good work it started.
“Our vision is to transform the economy through access to storage, market and financing. Now we have the secretariat of the AfCFTA in the country and we have a commodity exchange that can service all countries in the world.
“Our efforts are geared towards improving the livelihoods of smallholder farmers and the economy as a whole,” the CEO added.