An Appraisal of the Effectiveness of the Agricultural Development Bank’s Cocoa “Hi-Tech” Loans Program

Thumbnail Image
Journal Title
Journal ISSN
Volume Title
Agriculture has been the backbone of Ghana’s economy over the last century. About seventy percent (70%) of Ghana’s commodity exports are agricultural products, of which cocoa contributes about fifty five percent (55%). As such, there is the need to promote and increase the productivity of cocoa. It was in line with this that the Agricultural Development Bank introduced the cocoa ‘hi-tech’ loan programme in 2000. This research or study was designed to serve as a case study to assess the effectiveness of the cocoa ‘hi-tech’ loans introduced by the Adum Branch of the Bank in Kumasi, the Ashanti Region of Ghana. The overall objective of the study was to critically assess the scheme mainly in terms of its effect on cocoa productivity and repayment of the loan. The specific objectives were to determine the challenges encountered by farmers in acquiring the facility, determine challenges faced by the bank staff in the delivery and recovery of the facility, to find out if productivity of cocoa increased as expected and to determine the level of loan repayment. To achieve these objectives, a sample of sixty (60) farmers, who were randomly selected from thirty (30) groups, was interviewed. The senior staff at the branch with a population of twelve (12) were also given questionnaires to answer. Secondary data was also collected from various sources including the Bank, internet, and other relevant sources relating to the subject matter. The Statistical Package for Social Sciences (SPSS) programme was used to analyze the data collected. The study findings indicated that the productivity of cocoa increased significantly upon the introduction of the ‘hi-tech’ loans. However, the loan repayment rate has been very low leading to the suspension of the programme at the Branch in 2006. The study came up with some recommendations to reintroduce and improve the effectiveness of the programme. These include reduction of interest rates and processing fee charged, the provision of all necessary logistics, including, a separate vehicle for the credit department and involvement of agricultural extension officers, among others.
A Thesis submitted to the Kwame Nkrumah University of Science and Technology School of Business, Kumasi in partial fulfillment of the requirements for the award of Master of Business Administration Degree,2008