Incentives for Banks to Lend to Agribusinesses-GIRSAL

Freshly harvested mango-Agricinghana Photo

In the wake of global efforts to improve financing for agriculture, the Bank of Ghana in collaboration with the Ministry of Food and Agriculture, and the Alliance for Green Revolution in Africa (AGRA) is designing the Ghana Incentive-based Risk Sharing System for Agricultural Lending (GIRSAL) programme. The goal of this instrument is to reduce the perceived risk of agriculture financing and to crowd in private finance to support smallholder farmers across the country.

Food affordability and achieving a stable currency is at the heart of the central bank’s risk guarantee programme.

The GIRSAL instrument has six major pillars which are; risk sharing, digital finance, insurance, technical assistance, bank incentive mechanisms and a bank rating scheme. In all these, the Central bank may provide 75% risk guarantee to commercial banks which lend to smallholder farmers in Ghana. Also, the digital finance aspect is intended to serve farmers in rural communities where banking services are not available. Every farmer under the instrument is required to subscribe to agricultural insurance as a way to reduce investment risk and boost investor confidence.

The Ghana Commodity Exchange (GCX) will supplement the GIRSAL initiative to make financing affordable and accessible to farmers. The GCX which is scheduled to commence operations in 2017 has the objective of creating a market platform for agricultural products as a way to improve agricultural value chain and to guarantee better prices for smallholder products.  The GCX’s warehousing system will guarantee financial assistance for smallholder farmers who ordinarily will sell their products at ridiculously low prices in the market. The GCX initiative is already a public-private financing arrangement.


It is expected that the design of the project will be completed by January 2017. GIRSAL  will become functional by the end of the first quarter of 2017 as a company limited by liability —GIRSAL Plc Ltd., while project implementation will begin by the second quarter of 2017.

Editor’s Note: Agricinghana Media is following up on the current status of GIRSAL and GCX. We will keep our constituents updated.

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  4 comments for “Incentives for Banks to Lend to Agribusinesses-GIRSAL

  1. Afua
    September 30, 2017 at 12:08 pm

    Are the dates in this article accurate? If this is an old article then kindly provide an update on both entities.

    • agricinghana
      September 30, 2017 at 1:56 pm

      There’s an editorial footnote indicating that we intend following up with updates on the status of the implementation of GIRSAL and GCX. Kindly note that.

  2. Sintaro MAHAMA
    October 3, 2017 at 7:06 am

    Dear Editor,
    Your attention has been drawn to a possible discrepancy on the start date of both the company and operations of such. The article was posted on September 30, 2017 and yet the start date is supposed to be January 2017.
    Please check start date and confirm. Thanking you as always for the great works towards agricultural transformation in Ghana.

    • Agricinghana Media
      October 3, 2017 at 7:17 am

      Thanks Sintaro. What we intended to do with the article was to provide a “Recall” of the earlier intended start-date of GIRSAL to you our readers. We published it as such ( with the proposed January date) to provide a better historical context to the GIRSAL and GCX. We intend to get the needed updates to these initiatives and provide updated information on their implementation status. This will be published as a (new) agnews article to better inform our readers. Thanks so much!

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