By Iddi Yire
Accra, Dec 03, GNA – The International Finance Corporation (IFC) Ghana Warehouse Receipt System (WRS), in collaboration with the Ghana Commodity Exchange (GCX), has launched the warehouse receipt financing product with four savings and loans companies.
The companies are Sinapi Aba, Opportunity International, Adehyeman and Letshego.
Warehouse receipt financing is a lending technique that allows farmers, producers, and traders of agricultural commodities to access bank loans by pledging their warehouse receipts issued against commodities deposited in warehouses.
Mr Robert Owoo, the Chief Operating Officer, GCX, speaking to journalists at the launch in Accra on Friday, said the Warehouse Receipt System Project and the GCX provided opportunity for smallholder farmers to store their produce, access finance whilst waiting for the price of their produce to appreciate before selling.
Stakeholders operating within the WRS project were also seeking to create opportunities for smallholder farmers to access credit for their farming activities, he said.
Receipts issued by a warehouse operator serves as evidence that specified commodities with stated quantity and quality have been deposited at a particular location by a named depositor, whilst the warehouse operator holds the stored commodity in a certified warehouse approved by the Ghana Standard Authority and Securities and Exchange Commission.
The depositor can use the receipts to access funds from any of the participating financial institutions.
Mr Kennedy Owusu Poku, a farmer who tested the WRS and the GCX system and received financing after depositing his grains, said he was satisfied with the initiative and commended IFC and the Ghana Commodity Exchange for its implementation.
“I deposited my grains and I was able to access funding from the savings and loan company withing a week, this is a good initiative and farmers are grateful,” he said.
Reverend Ogbarmey Tetteh, the Director-General of the Securities and Exchange Commission, in a statement read on his behalf, commended the partners for delving into an area where a lot of people were skeptical about.
The IFC Ghana WRS Project is being implemented in nine regions of the country with financial support from the Switzerland’s State Secretariat for Economic Affairs.
It is a technical assistance and advisory services project aimed at setting up a well-functioning regulated WRS expected to facilitate access to credit by farmers and linkage to structured markets to reduce post-harvest losses.
The project addresses WRS on a policy and regulatory level, system level, including technical advisory, training, capacity building and awareness raising for various stakeholders in the public and private sector.
IFC—a sister organisation of the World Bank, and member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets.
It works with more than 2,000 businesses worldwide, using its capital, expertise, and influence to create markets and opportunities in the toughest areas of the world.
In fiscal year 2018, IFC delivered more than $23 billion in long-term financing for developing countries.
GNA