COVID-19 Recovery Credit Empowers Women and Youth SMEs in Ghana; Market Linkages Remain a Challenge

Garu: When the maize harvest finally came in at Garu in the Upper East Region, Anaba Lamisi stood quietly at the edge of her farm, watching bags of grain pile up under a makeshift shed. Two years ago, she could barely cultivate enough land to feed her household. Today, she has more maize, rice, and soya beans than at any point in her farming life. Yet instead of celebration, her face showed worry. According to Ghana News Agency, Ms. Lamisi is one of thousands of beneficiaries of a US$4 million microcredit facility established under Ghana's Post-COVID-19 Skills Development and Productivity Enhancement Project (PSDPEP), supported by the African Development Bank (AfDB). The intervention is designed to help women and youth-owned micro, small, and medium-sized enterprises recover from the economic shocks of the COVID-19 pandemic, particularly in agriculture and agribusiness. Across the Upper East, Northern, and other regions, the credit facility has enabled farmers who lost livelihoods during the pandemic to retu rn to productive activity. But as a mid-term review of the project reveals, increased productivity has also exposed a familiar structural weakness in Ghana's agricultural value chain: weak market linkages. At Danugu in the Garu District, Adamu Combat, a maize, soya beans, and sorghum farmer, remembers how the pandemic disrupted everything from access to inputs to credit. 'Before this project, loans from other institutions came with interest rates of 25 to 30 per cent,' he recalls. Through the microcredit facility, loans were offered at a concessionary interest rate of 12 per cent per annum, with flexible repayment terms. For Mr. Combat, the difference was immediate. 'In the past, I tried cultivating 50 acres, but paying back was difficult. With this reduced interest rate, I scaled down to about 25 acres and managed it better,' he said. Women account for the majority of beneficiaries under the project. Out of more than 3,500 MSMEs supported nationwide, nearly 70 per cent are women, many of them operating in rural and peri-urban communities. Madam Deborah Alalbila, a beneficiary farmer from Garu and a community leader, says the project had transformed women's farming activities. However, she notes that a concern has become common across farming communities in the region. Despite visible gains in production as a result of the credit facility, the absence of assured markets continues to weigh heavily on farmers. The microcredit facility was channelled through participating financial and non-financial institutions, including rural banks such as BESSFA Rural Bank, which operates in parts of the Upper East Region. Mr. Adams Ibrahim, Credit Manager at BESSFA Rural Bank, explains that the loans were designed not only to provide cash but to support a shift from subsistence to commercial agriculture. Loans are offered at 12 per cent interest over a period of up to 24 months, with a moratorium of about five months to allow farmers to harvest before repayment begins. So far, GH?52,392,164.00 has been disbursed to youth an d women-owned SMEs nationwide. In total, 3,558 MSMEs, comprising 1,801 males and 1,757 females, have benefited from the credit facility. Beyond credit, PSDPEP has broader goals, including skills development, infrastructure improvements in higher education for the health sector, and public communication on health and MSMEs. Mr. Abass-Adams Nurudeen, Chief Executive Officer of the Social Investment Fund and Project Coordinator, says the assessment was intended to determine whether the microcredit facility was meeting its core objectives. 'The project was designed to help SMEs whose livelihoods were lost as a result of COVID-19 to regain their footing,' the CEO tells the Ghana News Agency during a mid-term review in Tamale in the Northern Region. Dr. Patience Ekoh-Ugonma, Principal Social Economist and Task Manager at the African Development Bank, described the microcredit facility as a critical recovery tool for MSMEs affected by COVID-19. Approximately US$4 million has been made available under the project, with the entire amount fully disbursed to beneficiaries across the country to support recovery and boost productivity. Back in Garu, Ms. Lamisi says her hope is simple as they want to continue farming and improve their lives, 'but we need markets that give us fair prices.' For Mr. Combat, the intervention came at a critical moment, but pleads that 'If government and partners can help us sell what we produce, then this project will truly change our communities.' As the mid-term review of PSDPEP shows, affordable credit has helped thousands of women and youth-led SMEs recover from the pandemic's blow. The challenge now is to ensure that increased productivity translates into sustainable incomes by closing the gap between farm and market, and turning bumper harvests into lasting prosperity.