30 November 2021
Two members of the FACS team have returned from a successful and informative field visit to palm oil outgrowers and mills in the central region of Ghana. This field visit in early November 2021 was the latest contribution to the Sat4Business project.
FACS’ Kyle Joubert (Impact Investment Analyst) and Christopher Agyekumhene (Senior Agrifinance Advisor and Regional Representative West Africa) joined representatives of fellow project members Solidaridad West Africa (SWA) and Advans Ghana Savings & Loans to explore financing opportunities within the oil palm value chain in the Assin Fosu and Twifo regions of the country.
The team visited and interacted with staff members of Assin Oil Mills and the Central Oil Mills and got to understand the working relationship with local farmers. The team also set out to understand how the farmer associations work as well as the farmers’ credit needs, their repayment plan, and how their production can be increased.
“It was great to understand the linkages between the various actors and to work with them towards co-creating a financing model that harnesses their different strengths and needs in a manner that’s contextually appropriate,” said Christopher Agyekumhene.
The Assin Oil Mill is a critical asset for oil palm farmers in the region. The farmers have a shared interest in the mill, which was formed in 2014 and is funded by Solidaridad. Currently, farmers can supply up to six tons of palm fruit to the mill, according to field trip data gathered by Solidaridad.
“Assin Oil Mills was kind enough to provide us with a tour of their facility,” said Kyle Joubert. “It was fascinating to see how the mill makes use of the entire oil palm fresh fruit bunch (FFB) during the oil extraction process. For example, not only are the oil palm kernels collected for further pressing elsewhere, but the empty FFB is used as composting by the smallholder farmers.”
Another priority for the team during the Sat4Business Ghana field visit was to determine how financial lending could best help farmers yield better crops in the future. Toward this end, FACS and the team identified the credit needs for the farmers, including the cost for year-round labor; weeding, pruning, and fertilizing plantations; seedlings to replace felled trees; harvesting tools; and transportation of product to mill.
Sat4Business aims to support 140,000 Ghanaian oil palm and cocoa farmers to increase their food production and job creation by providing information products and financial services. FACS is involved in the project along with a consortium of other members, including Solidaridad, Satelligence, Akvo, Esoko, and the Ghana Ministry of Food and Agriculture.
FACS’ role in the project is to design and deliver crop-specific credit risk models and scoring tools, develop investable smallholder finance portfolios, and to provide technical assistance to local agri lenders participating in the lending pilots. Farmers will be profiled and loan needs will be shared for credit score generation by FACS.
LendXS, the digital credit services platform of FACS, is employed to help local lenders structure and manage financing and loan repayment plans for smallholder farmers.
The team is cooperating with Advans Ghana Savings & Loans, a subsidiary of the Advans Microfinance Network. In January 2021, the Sat4Business team signed a service agreement with Advans Ghana. Since 2017 they have been offering financial services to smallholder farmers through its value chain financing approach.
Following this field visit, the team will now continue discussions with Advans Ghana on how to best move forward with the lending program.