USAID-FinGAP facilitates $115m in agric value chain
The USAID –Financing Agriculture Project (USAID-FinGAP), aimed at addressing the key constraint of lack of access to finance in the agriculture sector, has in the last three and half years facilitated over US$115 million in the maize, rice and soy (MRS) value chains.
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The amount indicates that the project has exceeded its five-year (July 2013-July 2018) target of US$75 million before the end of the project.
USAID-FinGAP is an agribusiness project with a goal to facilitate finance and investment in the MRS supply value chains in the northern part of Ghana and improve ancillary services so that agribusinesses can operate at full capacity and expand levels of food security in the country.
The project works with three key actors to facilitate financing, and these include financial institutions, business advisory services (BAS) and the small, medium including large enterprises (SMiLEs).
A breakdown of data available at FinGAP shows that 1,485 transactions have been facilitated by its team and BAS providers and 40 strategic partnerships have been developed in target value chains.
Also, 1,448 SMiLEs and farmer organisations linked to 91,913 smallholder farmers and aggregators in the target value chains have gained access to finance.
Background
USAID-FinGAP supports USAID / Ghana’s activities in the United States government’s Feed the Future strategy, which aims to establish commercially-driven agricultural development services critical to sustainably reduce food insecurity and poverty.
Although Ghanaian farmers are capable of producing to meet the country’s need, they need proper investment support in the area of improved seed and fertiliser, mechanisation services and irrigation systems to do so.
Therefore, USAID-FinGAP facilitates financing in the MRS value chains from financial institutions to agribusinesses through its BAS providers, who package applications, business plans and records of the agribusinesses to present to the financial institutions.
Impact
The project has since its inception in 2013 helped enterprises realise over US$40 million in private financing and investment.
USAID-FinGAP is working with its network of BAS providers to consider equity as an alternative source of agribusiness financing for their clients, recognising the importance of flexible long-term capital for growth without the high interest rates and repayment schedules associated with traditional loans.