WCF Cocoa Livelihoods Program Improving Access to Credit

Featured Experts Holly Houston

World Cocoa Foundation
WCF CLP Farmer Cooperative CABB in Buyo, Côte d’Ivoire, Management team with Socodevi training agent and TechnoServe business advisor

In early September, I had the opportunity to accompany our partners at TechnoServe to visit several WCF CLP farmer communities in Ghana and Côte d’Ivoire who have taken part in the input credit program.  Farmer groups who have received training in good agriculture practices and business management skills through WCF CLP can further their farm productivity through the proper and safe usage of inputs, ranging from crop protective pesticides and fungicides to fertilizer for improvement of soil health.  Credit is an important element to improving access to farm inputs.  Cocoa farmers receive cash during two seasons of the year due to the harvest periods and do not benefit from constant cash flow during the year.  Furthermore, often when cash is needed to purchase inputs for the farm, farmers have priority expenses relating to the household.

Nestor, one of the lead cocoa farmers of CABB cooperation in Côte d’Ivoire, produces nearly 1,200kg/hectare through proper farming techniques, improved inputs, and diversified cropping. This tree has received two years application of fertilizer.

This year, over 1,500 farmers in Ghana received credit from WCF CLP partner Opportunity International Savings & Loan, amounting to 1 million Ghana Cedis.  The farmers receiving training from the input supply agents Callighana on correct application and protective gear are part of the package.  In Côte d’Ivoire, partner input supply company, Callivoire, provides similar packages on credit to farmer groups, around 500 this season. The loan packages are designed in a step wise approach starting with a 1-2 hectare package/farmer to introduce the farmer to the concept of credit and repayment.  In speaking with 4 different farmer groups in Ghana & Côte d’Ivoire, we heard similar themes across the program recipients.

  • Farmers recognize the quality and effectiveness of the licensed products provided versus less expensive, lower quality inputs and would like input packages for larger portions of the farm. As the financial provider and input supplier realize strong repayment rates, (this season 92% in Cote d’Ivoire and 85% in Ghana), these farmers as reliable customers and account holders, will be able to access larger packages.
  • Input packages can be adapted based on customer need.  Several of the farmer groups in Ghana mentioned the need for a simple labor saving tool that can remove widespread mistletoe from the top of the trees.  A cooperative in Côte d’Ivoire is keen on adding fertilizers to the package for their members and with some ready to pay in cash if supply was available at a closer access point.
  • Group loans versus individual loans are important drivers to success repayment.  Farmer groups are required to open an account with initial deposits and are responsible for repaying as one unit.  Social bonds within the group are crucial to a spirit of solidarity.  In some cases of late or non repayment, farmers took informal loans from relatives to remain part of the group.  In other cases, the group covered some of its members and with later reimbursement from the members.
  • Building a culture of using financial services requires trust and demonstration of the benefits.  Farmers are often isolated from any actual bank branch; OISL provided a mobile banking truck to reach communities and technical assistance has been provided by TechnoServe Business Advisors, OISL and the input supplier agents to sensitive farmers to timely repayment and building a strong relationship with a financial institution.  One female farmer in Ghana mentioned that she is building up savings in her account prior to taking on larger loans for her farm.
WCF CLP partner Opportunity International Savings & Loan Mobile Bank.

These inroads that are being made into proving successful credit models are encouraging signs of progress in improving cocoa farmers’ livelihoods.  In the upcoming cocoa campaign, WCF CLP will look to expand the models to include fertilizer packages in Côte d’Ivoire with credit provided by financial institutions through a private sector supported Growth Fund.