The Ghana Commodity Exchange and FBNBank have signed a Memorandum of Understanding (MoU) as part of the collaboration that will see FBNBank provide aggregation finance to members of the Exchange.
It will also ensure collaboration with GCX in the warehouse receipt financing programme while partnering with the Exchange to build the capacity of smallholder farmers.
Based on the undertakings in the MoU, the bank will finance GCX Cashew Aggregator through the aggregation financing scheme for the second edition of the GCX Cashew reserve auction to trade 1000 MT.
Commenting on the deal, Victor Yaw Asante, Managing Director of FBNBank Ghana said, “This arrangement is further proof of our commitment to fulfil our mutual undertakings in the MoU signed with the Ghana Commodity Exchange to support the members of the Exchange who require financing. This is mainly to small and medium enterprises (SMEs) and it ultimately supports trade in Ghana.”
“It also shows how innovative we can be in structuring credit to benefit key sectors of this economy, in this case, agriculture. Agriculture is arguably the mainstay of this economy and we are keen to assist in ensuring that it delivers its full potential, in order that it can contribute significantly to Ghana’s growth. On our part, we at FBNBank are excited about this collaboration with the Exchange and look forward to celebrating the success of the impact of this financial arrangement for Kaksfour Commodities and Investments Limited,” he said.
He said ‘delivering greater value to our stakeholders is in our DNA and we remain focused on assisting in the effort to transform this economy in order to take full advantage of the Africa Continental Free Trade Area (AfCFTA) and other trade arrangements available to Ghanaian producers, manufacturers and exporters. This is what we mean at FBNBank when we say we deliver the ‘Gold standard’ of service and excellence. This is what our brand promises.”
The GCX in turn offers risk management mechanisms which ensures that the required standards of cashew are met for either local or export markets and this gives the buyers confidence to purchase through the Exchange’s platform.
GCX also ensures that buyers receive the required quantities of commodities at the agreed price. Additionally, the GCX platform helps to secure buyers for the farmers’ and aggregators’ commodities even before harvest time, largely solving the issue of market access.
Commenting on the financing arrangement for the cashew aggregator, the Chief Executive Officer (CEO) of the Exchange, Tucci Ivowi said, “we are delighted that our member, Kaksfour Commodities and Investments Limited, has been able to secure credit, thanks to the partnership and the confidence stemming from GCX’s risk mitigation framework. Kaksfour is a professional organisation doing important work to develop the cashew sector.”
“We look forward to more support from our financial partner, FBNBank, so that we can widen the beneficiary network to allow more aggregators and smallholder farmers access to our aggregation financing and warehouse receipt-financing products respectively, for different commodity value chains. Our role and activities as a commodity exchange offer tremendous opportunities for Ghana and West Africa’s exports and creates exciting ways to increase Ghana’s competitiveness in global markets,” she said.
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