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News | Ghana Commodity Exchange

GCX INTEGRATES SISSALA RURAL BANK INTO WAREHOUSE RECEIPT FINANCING PROGRAMME

Date : 8th Jul, 2020


GCX INTEGRATES SISSALA RURAL BANK INTO WAREHOUSE RECEIPT FINANCING PROGRAMME image


The Warehouse Receipt Financing (WRF) Programme, rolled out by the Ghana Commodity Exchange in 2019 was finalized through a partnership with ARB Apex Bank, the Apex body for all Rural and Community Banks (RCBs) in Ghana. Since the partnership, four (4) rural and community banks have been integrated into the scheme.

The Sissala Rural Bank in Tumu of the Upper West Region is the newest financial institution to join the WRF scheme of the GCX.

In the pursuit of developing the agriculture sector of Ghana, the GCX encourages banks to expand into commodity backed lending. The Ghana Commodity Exchange trained key staff of the Sissala Rural Bank in Tumu in the Upper West Region, the aim of which was to integrate 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.

 

 

 

Additionally, a smallholder farmer from Wa was the first client to have a warehouse receipt duly financed by the Sissala Rural bank. Many more farmers in the Upper West region as well as any part of the country can have access to the Warehouse Receipt Financing Programme by becoming members of the GCX and thereinafter deposit their commodities into any of the certified GCX warehouses across the country. After this, the farmer can simply apply for warehouse receipt financing after obtaining the GCX warehouse receipt upon depositing his or her grains into any of the warehouses.

 

The General Manager of Sissala Rural Bank, Mr. Thomas Awini has expressed his appreciation to the GCX for the innovative work being done in transforming the agricultural sector and ensuring that the agricultural sector receives the needed accessibility of finance to grow.

 

The integration of Sissala Rural Bank in Tumu is a step further into developing agricultural finance for the agriculture sector of Ghana. The rural bank can now provide farmers with loans with the farmers using their deposited commodities as sole collateral. Undoubtedly, through the WRF scheme, the livelihoods of farmers as well as depositors of agricultural commodities will be significantly improved.

 

The GCX 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.

 

The Quality Management of GCX also plays a vital role in ensuring that the 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 Sissala Rural Bank, which is under the auspices of ARB Apex Bank, is dedicated to meeting the financial needs of rural folk within the communities of the Upper West region. It is no surprise that the rural bank has now committed to ensure that there is increase access to finance and optimization of marketing strategies for smallholder farmers in the region.

 

Ghana Commodity Exchange through its Warehouse Receipt Financing scheme has supported over 150 smallholder farmers with access to working capital across the country. 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.