Agricultural Development bank (ADB) since its inception in 1965 has been committed to the provision of credit facilities for the development and modernization of agriculture and allied industries in Ghana.
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It is estimated that ADB is currently responsible for about 85% of institutional credit to agricultural sector workers and entrepreneurs.
What facility overlooks Agric Finance at ADB?
The Agribusiness Division of AD is responsible for services assigned to Agric Finance. It is made up of two departments namely the Agricultural Value Chain and the Agricultural Services Department
- The Agricultural Value Chain Department: the unit is charged to deepen financing to the primary production industries by focusing on developing viable value chains
- The Agricultural Services Department:this division provides financial inter-mediation to the agro-marketing, agro-processing and agricultural support sub-sectors such as inputs distribution as well as agricultural – related infrastructure across the country.
How are finances classified?
Agric finances is classified on a number of factors namely;
- Size of loan
- Status of the borrower whether a group,an individual or a limited liability company
- Type of project or scheme to be carried
- Purpose of loan if given
- Source of funding
See Also: Ecobank Ghana Profile
What types of loan are given under Agric Finance?
The Agricultural Development Bank based on factors like cash flow, capital outlay and project maturity of borrower classifies the loan facility into three and they are:
- Short-term loan:It is granted as working capital to meet production,transportation and marketing of agricultural produce of the borrower.The period for short term loans is up to 18 months
- Medium-term loan:It is granted for purposes such as the purchase of farm equipment, rearing of livestock and processing equipment. The period for loans repayment is between 18 to 36 months.
- Long-term loan:It has been designed for new and existing projects which require heavy capital outlay or long incubation periods. An example of such facility is an establishment of plantations or cattle ranches.The period for long term loans is normally slated between 36 months and 84 months.
What are the requirements for the loan?
ADB would require the following from aspiring borrowers:
- Submission of business proposal
- Opening of account with the Bank
- Details of account operation with other financial institutions
- Evidence of managerial capability to handle project
- Evidence that project is not environmentally harmful
- Evidence that project can generate adequate cash flows to support repayment of facility
- Provision of security acceptable to the Bank
Anyone involved in an agricultural venture and seek to secure a loan at the ADB,must do so with the surety that security provided by ADB is competitive.