The Savannah Accelerated Development Authority (SADA) has been given the approval by the Finance Ministry to set up banks in the three regions of the north.
The Savannah Investment and Development banks when established will provide capital for farmers in these three regions.
The farmers through the bank will be able to procure loans for between five and six years which will enable them buy tractors, prepare their lands and purchase other farming implements.
The setting up of the banks forms part of a new direction that management of SADA is persuing to revive the body mandated to drive the growth and development of the three regions said to be amongst the poorest regions in the country..
In an interview with Joy News’ parliamentary correspondent, Elton Brobbey, CEO of SADA Charles Abugri explained that this new direction will ensure stricter financial regulations for the authority’s plan.
He said SADA is bent on ensuring business operators and farmers have the resources they need to make the change happen.
“How do we get the Volta river turned into a proper transport corridor…How do we make Tamale and Kintampo thrive as cities…That is the biggest challenge and we are looking at different ways to do this,” he said.
One of the ways to do this is the establishment of the financial institution, he added, “Fortunately after discussion with the ministry of finance, it has given us no objection to pursue the idea which means it is sensible.
“And one of the ways it will be crystallized is to create a wholesale bank which will raise money from international capital markets in the long term and lend them to existing commercial banks, saving and loans companies to enable them lend in medium terms,” he added.
He stated that the unavailability of medium and long term loans for farmers makes business difficult and was hopeful that the bank will help solve these problems.
Campaign Coordinator of the Integrated Social Development Centre (ISODEC) Dr Steve Manteaw welcomed the development.
He said “It is a good idea and the integrated social development centre has always maintained that these are the kinds of things you do with banks that are nationally owned.
He however casts doubts on the financial ability of the banks which will be set up. He believed their financial standing might hinder the project.
“Usually you would need a bank which is well rooted and highly capitalize to be able to mobilize the kind of resources we are talking about for investment in those areas…I get the sense that the mobilization of resources is going to be external rather than internal and that also has its own implications for the cost borrowing.
“We can mobilize a lot of resources from within at cheaper cost for financing development in the savannah zone,” he added.
He expressed confidence in the new management of SADA and was hopeful that they will be able to “take SADA where it needs to be.”