Exploring Access to Finance Options

By Olav

How can horticultural smallholders gain access to credit from formal financial institutions in the peri-urban region of Kumasi and through which measures can their financial inclusion be improved?

I’m Olav, a master student of Management of Technology, and for my graduation project I’ve been in Ghana for 8 weeks to study the financial inclusion of small-scale horticultural farmers in the peri-urban area of Kumasi. My thesis is part of the Archipelago project, a collaboration between TU Delft, Kwadaso Agricultural College, and Holland Greentech.

To make small-scale agricultural businesses successful, lack of access to financial resources has been observed to be a crucial factor that hinders innovation adoption and sustainable business growth. My thesis set out to explore this problem using a framework of financial inclusion, which focuses not only on access to, but also usage and quality of local financial services. To do so, I have conducted interviews with different small-scale farmers, many of whom where alumni of the Archipelago program, to evaluate their business growth, challenges and experiences with finance. To contrast their perspectives, I questioned a diverse range of local financial institutions to understand how their product offerings, selection procedures and risk management practices relate to the financial abilities and needs of small-scale horticultural businesses.

I hope that my research can serve as a problem benchmark on which future horticultural development programs can be based.
Olav

During my research I stayed in Kumasi, at the Kwadaso Agricultural College, which has been an amazing experience. Getting to know Ghanaian farmers, financial managers, credit officers, students, teachers, entrepreneurs, taxi drivers and many more has been very valuable, and I have learned so much from all of them. Being a research team of 1, living and working in an unfamiliar environment was definitely not the easiest at times. However, I think it has really allowed me to experience the people and their culture in a unique way. It has been eye-opening to see how welcoming, caring and helpful Ghanaian people truly are.

Currently, I’m processing, analysing and organising my results. With them, I intend to highlight key financial knowledge that can be crucial for horticultural entrepreneurs, and could be incorporated into financial educational programs, such as Archipelago. Furthermore, I hope to clarify on and improve understanding of factors causing the financial mismatch that is currently experienced by small-scale horticultural businesses and local financial institutions.

Small-scale farming systems hold a crucial role for the improvement of livelihoods, poverty reduction and food security in the developing world. However, smallholders face the problem of limited access to credit and higher transaction costs, which are critical to adopt improved technologies and farming practices.
Olav