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ACTIVITY 5: CREDIT SERVICES
There was a general decline in the disbursement of Funds during the Quarter under review, a reflection of
the slow-down in demand for agric financing as the major season in the major agricultural areas
approached or came to an end in its production cycle.
Some modest achievements were recorded during the Quarter including (i) the recruitment of additional
FNGOs to increase the number of accredited PFIs, (ii) demand for disbursements to post harvest borrowers
to purchase the produce from production activities, (iii) the increase in the distribution of the credit to more
smallholders in FBOs (d) implementation by Bank of Ghana Management of tough measures to demand
outstanding payments by three Commercial Banks in default, and (iv) improved Stakeholder consultations.
The persistence of rather worrying trends remained a source of concern. Over last Quarter, the major
impediments which confronted the Credit Program included (i) a doubling of the growing delinquencies,
that is, inability by PFIs/Borrowers to meet their maturing Principal and Interest Payments which increased
from 9.96% to 18% by end December 2010, (ii) high Lending Interest Rates, (iii) increasing number of
PFIs which have become or remain ineligible to lend due to various breaches in Key Indicators
benchmarked in the Policies and Procedures Manual thus restricting ability of PFIs to lend, (iv) the over
concentration of Credit in the SHB and also the Production segment of the Value Chain thereby skewing
the Risk Profile of the Portfolio of the Lending Institutions; and (v) weak Monitoring and Reporting
mechanism to engender rapid and effective control of identified deficiencies in the Credit Flow Cycle.
The efforts to mitigate these challenges have been unrelenting. They have included the following:
i. Sensitizing the Banks to improve their Risk Management practices and encourage Lending to other
levels of the Value Chain. These measures were reinforced during the Field Trips by BoG and ACPC
Teams and also during the ACP Stakeholders Review Meeting held in Kumasi in November 2009.
ii. The approval by MiDA Management and the commencement of implementation of the Grants to
PFIs to acquire effective means of Transport to improve Oversight of Loans extended to Smallholder
Farmers who are dispersed over wide geographic Locations, in addition to its intention to develop
Loan Offices to improve access to Finance by Rural Dwellers.
iii. Continued implementation but this time more focused Skill-based (rather than Knowledge building)
Training of the PFIs staff to be more effective in the Appraisal and Monitoring of Agric Credit
through Mentoring and Coaching of PFI Staff by ACPC to improve Repayments and more effective
Loan structuring.
PROJECT 2: TRANSPORTATION PROJECT
There were few modifications to the Work Plan causing Timelines for Deliverables to Quarter 11 to slip.
This was as a result of delays in Procurement for Trunk and Feeder road works.
In accordance with the Contract, deliverables of the Project Management Support Consultant are on
schedule. Also, MiDA/MCC organized a 5-day Workshop for Consultants/Contractors on Contract
Administration, Management of the Works, implementation of Environmental, Health and Safety Plans,
Quality Control and Risk Management at Site.
ACTIVITY 1: N1 HIGHWAY
The challenges to the main Works are the inability to timely implement the RAP for N1 Lot 2 which has
been on the critical path since the last Quarter. MiDA and LVB are collaborating to expedite action on the
implementation of the RAP.
ACTIVITY 2: TRUNK AND FEEDER
There has been slight change in Timelines for Trunk Road Activity and Feeder Road Lot EC Series (Lot 2)
as Pre-construction activities, especially full mobilization of resources at the Sites is still in progress.
Timelines on Procurement for the NR Series (Lots NR1 & NR 2) is steadily on course. The Procurement
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