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Our Approach

HOW GIRSAL Operates

GIRSAL operates with its immediate and direct clients being the financial institutions made up of universal banks, savings and loans companies, rural and community banks, and other lenders or investors who demonstrate a desire to work with GIRSAL.

Key Strategies

GIRSAL applies a 6-pillar approach to mitigate unique risks of agricultural finance including both supply-side and demand-side intervention. These 6 pillars come under two Components. (i) De-risking Instruments and (ii) Incentives and Enablers

Participating Financial Institutions

GIRSAL Pillars

GIRSAL applies a 6-pillar approach to mitigate unique risks of agricultural finance including both supply-side and demand-side intervention. These 6 pillars come under two Components. (i) De-risking Instruments and (ii) Incentives and Enablers

Risk Sharing Facility

This will be used to develop appropriate risk sharing instruments that can be used to reduce the risks of banks and leverage their balance sheets into agriculture lending

Bank Rating Scheme

To rate all banks in Ghana based on their lending to agriculture, with the goal of creating additional incentives for banks that are achieving impacts in agricultural lending

Technical Assistance Facility

This will be used to strengthen the institutional capacity of banks and intermediaries to support new lending into agriculture, develop new platforms to support delivery of loans to rural areas, as well as provision of technical assistance to farmer groups and agribusinesses

Bank Incentive Mechanism

This will be used to develop appropriate incentives to reward banks that are lending to the agricultural sector, based on the volume of lending, effectiveness of lending and impacts

Insurance Facility

This will be used to develop and deploy appropriate insurance products for agriculture to lower risks faced by smallholder farmers and agribusinesses;

Digital Finance

To significantly increase the low-cost distribution of financial services particularly in rural areas using mobile phones and other digital distribution channels. Will also serve as knowledge center

GIRSAL Business Model

Schematic Transmission Mechanism of GIRSAL


1

Qualifying Financial Institutions sign on to the GIRSAL master agreement and Risk Sharing Framework to participate in the programme

2

Participating Financial Institutions accept loan applications from agri-businesses within the supported value chains

3

Once the Financial Institution grants internal credit approval for a specific loan, they then apply to GIRSAL for Credit Risk Guarantee (CRG)

4

GIRSAL assesses CRG application from Financial Institutions. If an CRG application is successful and fees are paid, GIRSAL grants the GRG cover

5

GIRSAL works closely with Financial Institution to monitor loan repayments and defaults, and processes recovery and claims process as applicable

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