- The Warehouse Receipt Financing (WRF) Programme was rolled out by the Exchange in partnership with ARB Apex Bank.
- The WRF Programe has supported over 150 smallholder farmers with access to working capital.
- The programme advances credit facilities to GCX members or clients at very moderate interest rates.
- It has engaged fifteen rural and community banks across the country so far.
- ARB Apex Bank set aside over GHc 50 million to commence the programme.
The Ghana Commodity Exchange has successfully integrated some Rural and Community Banks (RCBs) into its Warehouse Receipt Financing (WRF) Programme. The programme has supported over 150 smallholder farmers with access to working capital across the country.
In a statement, GCX said, “in spite of the unexpected pandemic (COVID-19), more awareness will be created through training programmes and campaigns for the communities in Upper West Region and other parts of the country to allow more farmers to take advantage of the financing scheme”.
GCX
Currently, five out of the over 140 RCBs operating all around the country, have been integrated into the warehouse receipt financing programme system and the process can be expected to eventually incorporate most of them into the programme which began eight months ago.
According to Exchange, the “warehouse Receipt Financing scheme is simply GCX working with partner banks to advance credit facilities to GCX members or clients at very moderate interest rates.
“The GCX Warehouse Receipt is backed by Ghanaian law, namely the Securities Industry Act, 2016 (Act 929) which allows the warehouse receipts to be used as financial instruments. The warehouse receipts are also backed by insurance, performance bonds and alee indemnities which make them as good as cash”.
Ghana Commodity Exchange
Similarly, the WRF model has engaged fifteen rural and community banks across the country so far, which means 10 more RCBs are already getting set to join the five now fully incorporated. This is a major step towards developing an efficient and effective agricultural finance channel for the agriculture sector.
As part of its commitment, GCX also ensures that deposited grains that may be subsequently used as collateral are always of top quality.
“Fumigation, regular stock counting, 24-hour security camera surveillance as well as day and night security guards are deployed at the warehouses to ensure security, quality and mitigate losses which may arise from unforeseen occurrences”, the statement read.
The Ghana Commodity Exchange has also trained key staff of the Sissala Rural Bank in Tumu in the Upper West Region with the aim of integrating the bank into the GCX warehouse receipt financing system by taking them through how GCX Warehouse Receipt Financing works and also familiarize them with the operations of the GCX and other financial aspects of agricultural lending in relation to GCX.
It said, “In the pursuit of developing the agriculture sector of Ghana, the GCX encouraged banks to expand into commodity backed lending”.
The Warehouse Receipt Financing Programme is an innovative way of providing access to finance using the GCX warehouse receipt as sole collateral for accessing loans, and it has become more crucial because the borrowers would sell their produce on the GCX – which provides a ready market.
Late last year, the Warehouse Receipt Financing (WRF) Programme was rolled out by the Exchange in partnership with ARB Apex Bank. As part of the arrangement, the ARB Apex Bank set aside over GHc 50 million to commence the programme.
The Sissala Rural Bank in Tumu of the Upper West Region is the latest financial institution to join the WRF scheme.
The Exchange is hopeful that in spite of the unexpected pandemic (COVID-19), more awareness will be created through training programmes and campaigns for the communities in Upper West Region and other parts of the country to allow more farmers to take advantage of the financing scheme.
