GIRSAL Ltd and Ghana Commodity Exchange (GCX) signed a memorandum of understanding to help de-risk agricultural financing and to support affordable financing for agricultural value chain actors in Ghana.
The Chief Executive officer of GIRSAL, Mr. Kwesi Korboe, and Chief Operation Officer of GCX, Mr. Robert Dowuona Owoo signed the agreement on Friday, 25th February 2022.
GCX has a structured trading system that supports farmers by helping them develop their markets and income. It aims to increase liquidity in the commodity market and enhance price discovery, increase farmers’ bargaining power and share of created value, ensure trade integrity and transparency, and reduce default risk.
“Agriculture financing is a top priority for GIRSAL, said Mr. Korboe. We are pleased to collaborate with GCX to facilitate and improve access to finance by agricultural actors in Ghana. Knowing how essential the GCX platform is in reducing risk within market-related activities, we are hopeful that this collaboration will yield positive results”.
The Chief Operation Officer of GCX, Mr. Robert Dowuona Owoo stated that this collaboration is a big step towards ensuring that farmers, especially commodity traders on the GCX, receive much-needed financing from banks at affordable interest rates. This will also encourage financial institutions in Ghana to lend to smallholder farmers and rely on their produce as the sole collateral.
The agreement provides GCX access to all GIRSAL partner financial institutions and supports the financial institutions to develop aggregation and warehouse receipt financing products to support smallholder farmers. Through this collaboration, GIRSAL will provide Credit Risk Guarantee cover and technical assistance to its partner financial institutions financing GCX aggregators, brokers, and smallholder farmers.