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Cashless Value Chain Crop-financing by CARD: A Partnership Model
Financing small farmers through cashless model
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This note introduces Centre for Agriculture & Rural Development’s (CARD) Cashless Value Chain Crop-financing model for small farmers in Ghana.
The note states that crop production is considered a high risk area by financial institutions in Ghana. Yields depend on climate, soil fertility, technology and financing. The note discusses principles and steps involved in the Cashless Value Chain Crop-financing model which was introduced to ensure productivity of small farmers. These include:
- CARD mobilizes farmers, provides training and organizes them into self-selected groups;
- CARD pays for mechanized ploughing, threshing and transportation;
- Supplies are jointly procured by CARD and farmer group executives and disbursed on credit;
- Farmers may repay in cash, kind or use a combination of the two methods;
- Credit officer supervises and inspects field operations;
- Produce prices are pre-determined and quantity of produce for repayment is calculated;
- Neglected fields are taken over by the group;
- Inventory credit facility ensures good prices;
- CARD charges 3% processing fees and 27% interest on loans.
The note states that CARD has been experiencing 100% loan recovery from clients in Northern Ghana.
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