Financial institutions in the West African sub-region have been urged to get conversant with activities of operators in the fertiliser value chain in order to provide them with the needed financial support.
Speaking at a workshop held in Accra yesterday, an agriculture consultant and former banker, Mr Francis Osei, encouraged finance firms to continue to invest in the agriculture sector, especially, those within the fertiliser value chain.
Mr Osei, who is the Managing Consultant of the IESO Agribusiness Consult, a finance and investment advisory, said the time had come for financial institutions to take keen interest in agriculture financing.
He was speaking at a two-day seminar organised by the African Fertiliser and Agribusiness Partnership (AFAP), an agribusiness company as part of the West Africa Fertiliser Programme (WAFP).
Mr Osei dismissed suggestions that financial institutions usually avoided or reduced the rate of advancing loans to operators within the fertiliser supply chain partly due to bad debts or chunks of loans sitting in their books.
Fertiliser programme
The workshop was sponsored by the United States Agency for International Development (USAID).
It brought together players in the agriculture and fertiliser supply chain sector and the financial institutions to address the bottlenecks as far as the financing of the former is concerned.
The workshop afforded fertiliser suppliers the platform to make a case for appropriate financial tools which could build their businesses and scale up fertiliser markets in West Africa and beyond.
Financial consultants also shared the volume of fertiliser traded in West Africa and the need for banks to support the sector with affordable capital.
Experiences from elsewhere
Citing experiences from some European countries, Mr Osei indicated that the time had come for banks to throw their full support behind farmers.
“There are banks in Europe whose focus is to provide strong financial backbone to farmers and fertiliser producers.
“It is time for financial institutions in the sub-region to do same,” he said.
He also pointed out that “there is the need for the banker and financial institutions to understand the agriculture business as far as fertiliser sale is concerned.”
That, he said, would enable bankers to understand the operations of such group of people as well as the risks involved in their business and the conditions and measures to put in place to handle such risks.
By and large, he added, it would also enhance their market knowledge about the sector and even assist farmers to take prudent measures in their business.
Increase support
In an interview, a Finance Specialist for AFAP, Mr Bill Wolfe, also added his voice to the call on finance houses to increase their support to fertiliser suppliers.
He said the kind of support farmers provided could not be underestimated, hence the need for bankers to continue to advance loans to them.
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