ADB Products and Services
FINANCING CASHEW FARMERS ADB’S PRESENTATION AT GHANA CASHEW DAY CELEBERATION HELD AT EUSBETT HOTEL,SUNYANI ON THURS.10TH DEC. 2009
THE AGRICULTURAL DEVELOPMENT BANK
VISION To become a leading strategically managed and profitable Bank with a defined commitment to Agricultural and Rural Development
MISSION “Growing a strong customercustomer-centric Bank, providing profitable and diversified financial services for a sustained contribution to agricultural development and wealth creation�
CORE VALUES P R I M E
- Productivity - Responsiveness - Integrity - Meticulousness - Excellence/Efficiency
OPERATIONAL STRUCTURE - Departments - Area Offices (7) - Branches (55) - Agencies (8) - Farm Loan Offices (4)
Agricultural Credit Facilities
Our Business Focus On On--Farm/Primary Production (Food, Industrial & Cash Crops, NonNon-Traditional Export, Fishing, Aquaculture, Poultry and Livestock) Agro Agro--processing (Small scale rural processing & Industrial Scale processing Agric Business Financing (farm produce marketing and distribution eg. grain inventory, input distribution, agricultural mechanization (including hiring services), warehousing, transportation and haulage
Agro Export (Packaging, Purchasing, Transportation etc. of Agricultural produce for export)
Cocoa SubSub-Sector(
Maintenance of old farms, development of new farms, purchase of cocoa beans by Licensed CocoaCocoa-Buying Companies, HiHi-Tech Cocoa Maintenance Scheme)
Our Agricultural Credit Facilities are geared towards meeting our business focus. They come in the form of PRODUCTS/SERVICES and their corresponding PACKAGES/OFFERS. The beneficiaries are INDIVIDUALS, FARMERFARMER-BASED ORGANISATIONS (FBOs)/GROUPS AND COMPANIES
REQUIREMENTS FOR FBOs/GROUPS
Considered here are the mode of formation and characteristics: Groups/societies could be loose associations initially coming together. Already existing groups are preferred. Minimum number of farmers – five(5) and a maximum of twenty (20), sometimes fifty (50), depending on the farming activity. Animation:-Animation: - A group of farmers themselves coming together for a common purpose/assistance.
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With assistance from Ministry of Agriculture and/or Non – Governmental Organisations (NGOs) alongside the Bank. The bank itself as the last resort
Membership-as diverse as possibleMembershippossiblecomprising people from various families and never a oneone- family affair. Very homogeneous and belonging to separate catchment areas.
Common identityidentity-fundamental reason for coming together e.g. undertaking same type of farming activity. Constitution/ ByeBye-laws –binding on all members: i) levying / regular payment of dues. ii) ensuring regular meetings after formation iii) assistance to members To mature into fullyfully-fledged associations and to register with the Registrar of CoCooperatives
AGRICULTURAL LENDING ACTIVITIES AVAILABLE TO Groups/scheme Loan Customers
On On--farm or primary agricultural production – foodcrops eg maize, vegetables, industrial crops, cocoa beans, non traditional export, fishing, livestock and poultry Agro--processing: Agro processing:-- small –scale rural processing ventures eg palm oil, shea butter. Agric business:business:- farm produce marketing and distribution, transportation Cocoa subsub-sectorsector- maintenance of old and/ or development of new farms mainly in the form of HiHi-Tech Cocoa maintenance loan schemescheme-
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Credit in the form of fertilizers, agroagrochemical, farm equipment , tools, provision of farm services( weeding, prunning, application of chemical fertilizers. Small--Mango Project Small Young farmers programme Block Farm Scheme
CATEGORIES OF AGRICULTURAL LENDING OPTIONS
Available are the following : Group loans – usually commoditycommoditybased as already mentioned with animation by the Bank with technical advise by MOFA Lines of Credit:Credit:- credit based on lines of credit secured from bilateral and multilateral financial institution eg African Development Bank to promote specific agricultural activities or subsub-sectors
Managed funds:funds:- this involves the administration of donor funds ( assistance) from bilateral and multilateral sources such as USAID, DANIDA etc as well as government assisted agricultural programmers Credit - line:line:- this has involved credit in the form of inputs, farm services, etc. This way also be linked to group loans, lines of credit, managed funds etc
Nucleus-out grower Schemes: this Nucleusinvolves credit in cash and in kind through large scale nucleus farmers to a number of small scale outout-growers numbering between 55-20. These outout-growers supply their produce to the nucleus farmers Nucleus farmerfarmer-is a largelarge- scale farmer Out--growers Out growers-- are smallsmall-holder farmers working under the nucleus farmer on a land owned by the nucleus farmer. Block Farms Scheme
The nucleus farmer recruits the small holders, supplies them land and input to use, and then takes over their produce during harvest. ADB finances the nucleus farmer to organise and provide inputs, technical support by way of land preparation, weeding, fertilizer application and marketing outlets for the small holders eg food crop (maize)
Modes of ApplicationApplication-Eligibility for Loan
Open to allall-Both customers and non customers can access agricultural credit at ADB. Individuals Farmer--Based Farmer Organizations(FBOs)/Groups/Societie s Companies
ADB’s Requirements for Groups
Submission of application at a branch Interview of applicant(s) Completion of ADB Loan Application form Visit to site /Verification of documents Valuation of property by the Bank Preparation of credit report/submission to the approving authority
Security Security or Collateral must be offered for all loan mode by the Bank except loans under group credit schemes. With groups Savings accounts are opened for both the group and individual members of the group. That of the group should have a balance amounting to 25%(5%) of whatever facility that group requires from the bank. -As regards managed funds/lines of credit an account with any amount from five Ghana cedis(5GH¢) and above is allowed. In addition the group elects its own executives who jointly and severally indemnify the bank when the loan when is approved. -The executives also assist in the collection of loans at the end of the season. -Group pressure is thus applied in the administration of loan.
Amounts approved for such groups are normally purpose driven: Purchasing of farming inputs ,outboard motors, nets and canoes.
Products/ Services
Cashew Development Project • sponsored by the Government of Ghana and the African Development Bank. • it is to increase the production and processing of cashew at the village level.
Package/Offer - Interest rate (15% p.a) - Processing fee (0.5 – 2.0%) - Period (Short Term - up to 18 months, Medium Term – 18 months to 60 months and Long Term more than 5 years)
- Security (Group Executives for Group Loans, Personal Guarantors, Cash Collateral, Life Policies, Landed Property, Plant and Equipment)
• to help reduce their level of poverty. • To earn foreign exchange for the national economy
INTEREST RATE IS SPECIAL 15% p.a.
• ADB administered the credit for (i) the establishment of cashew nurseries and plantations (ii) acquisition of processing and other equipments Total disbursement is GH¢ 2.44m for 1,187 groups
CASHEW FINANCING BY THE AGRICULTURAL DEVELOPMENT BANK
This was by way of Ghana Government policy geared towards poverty reduction in parts of the BrongBrong-Ahafo and the Northern /Upper regions . Cashew Development Project thus formed 1out of 5 projects funded by the African Development Bank. Other areas include: Foodcrop Development Inland Valley rice production
Livestock Development Small Scale Farming So far it has been a collaboration between Ghana Govt.(MOFA) and the Agricultural Development Bank. ROLE OF MOFA is as follows: -Group identification & formation -Which farmers are interested in cashew farming or are already involved and would need to expand.They would be key members(executives) -Formation of groups with membership of 5 5--20 -Education of Farmer groups.
Introduction of groups by MOFA to the Bank. -Bank Credit Officers then join MOFA to coco-vett the groups for selection. -Groups’ farmlands and necessary documents are verified -Group executives are then invited to Open bank accounts.
After approval: Documentation Disbursement Repayment
Groups applications are then channelled through MOFA to the bank for approval Loan disbursement date is then scheduled. SUCH MUST BE A GOOD LOAN REQUEST. Other Products are as discussed earlier on. We also so encourage farmers to open personal Savings,Fixed Deposit accounts & Current Accounts.
SUCCESS STORYSTORY-The Banks experience in the Cashew sector Most farmers & farming communities Have become better off financially. -Improved livelihood -Source of income for children’s school fees. -Inter Inter--cropping gives availability of food all year round. -Most farmers are eager to improve farm size with improved varieties.
Parts of the value chain from the Banker’s point of view
Repayment of the loan on time. Maintaining a good & progressive farm. Abiding by all rules required by the project. Developing a good savings culture.
HOW CAN ACA COOPERATE EFFECTIVELY WITH BANKS.
Be involved in group animation,formation and education Capacity building of group members. Pricing and Marketing of the cashew.
Key Objectives
Basically to enhance the agricultural credit delivery system and remove all the major bottlenecks constraining the provision of financial support for the agricultural sector operations. To increase the production and productivity of Ghana’s high value cash & food crops. Broadly, to enhance the competitiveness of Ghana’s highhigh-value cash & food crops in both local and international markets.
To enhance: (i) the profitability of cultivation (ii) services to agriculture and product handling (iii) to support the expansion of commercial agriculture among groups of small holder farmers in the intervention zones.
Why ADB? We know we are your right partner because we are:
AFFORDABLE
DEPENDABLE
BOLD
THANK YOU