Cocoa smallholder farmers need working capital and need to make investments in farm maintenance/rehabilitation to assure productivity. However, none of the currently existing finance products matches their cash flows and they often lack securities to collateralize bank loans. In addition, the costs for banks in servicing these farmers is relatively high given the small credit amounts demanded by them. Hence, banks are not inclined to lend to this segment. More fundamentally, banks generally lack know-how and understanding of the particular risks related to cocoa farmers' cash flow cycles and opportunities in cocoa crop financing.

The objective of the Agribusiness Financing Facility (AFF) is to improve access to finance to cocoa producers and to increase the banks understanding of the financial needs of farmers and their organizations. Thanks to AFF's intervention, it is expected that 5 financial service providers have developed cocoa specific lending schemes providing an estimated aggregated amount of CHF 20 Million in credit to farmers' organizations.

On the demand side, AFF will facilitate the establishment and management of farmers' savings and loan cooperatives by means of improving their bankability and empowering them to make informed decisions about financial services, thereby fully respecting the farmers# financial autonomy.

On the supply side, AFF will provide know-how about the need of cocoa farmers and enhance financial service providers' capacities to better service farmer organization groups on the basis of farmer specific data that allows to customize respective financial products. By working with different partners for facilitating access to farmers (banks, traders and buyers), the project aims to advance access to finance through different channels.

Principaux résultats attendus:  

Financial Cooperatives and/or Financial Divisions of Farmer Organizations are established and operational.

Business Development Service Providers strengthened and facilitated to provide services to Farmer Organizations.

Developing Agribusiness Financing Models and Lending Products.

Financial Institutions and/or Credit Provider supported with links to Farmer Organizations.

Public and private program implementing partner institutions participating in workshops and/or joint activities.

Best practices developed with the sector and related stakeholders, promoted and documented.

Phase 1 01.03.2014 - 31.12.2016   (Completed)