Summit Vision Microfinance has since 2021 disbursed over US$375,000 in working capital to cashew producers in the Offinso North district of Ghana’s Ashanti Region to increase production.
The working capital was disbursed to cashew nursery operators for grafting seedlings, and for smallholder farmers to expand their farms.
The financing by Summit Vision Microfinance, according to Offinso North District Chief Executive Asare Bediako, is contributing to the government and district assembly’s strategy of transforming the area into a major cashew production hub, create jobs for youth, alleviate poverty and contribute to economic growth.
“My district is better-off economically. Most of the farmers who received financing from Summit Vision Microfinance to procure seedlings have seen their crops maturing, and are now looking forward to a bumper harvest and good returns on their investment,” he said.
Until about five years ago, farmers in the Offinso North district of Ghana’s Ashanti Region mainly cultivated cocoa – until dry soil conditions emanating from the effects of climate change began to significantly reduce their yields. Faced with a threat to their livelihoods, after consulting community leaders the farmers decided to grow high-value cashew for export. But first they had to overcome access-to-finance challenges; like buying cashew seedlings, polythene plant-pots and other agricultural inputs needed to set up nurseries, hence them accessing financing from Summit Vision Microfinance.
For instance, during the 2021 production season, Summit Vision Microfinance disbursed US$31,944 to the Nkenkaasu Cashew Group for buying grafted cashew seedlings, planting bags; and accessing water and hiring labour to cultivate 215 acres of cashew.
“We contacted financial institutions for loans, but they were not interested in financing cashew production because they considered it a long-term investment with uncertain prospects,” said David Wiafe, leader of the 224-member Nkenkaasu Cashew Group – 35 percent of whom are women.
Help eventually came from Summit Vision Microfinance, one of 16 partner financial institutions of the USAID-supported Feed the Future Ghana Mobilizing Finance in Agriculture (MFA) Activity. MFA works to improve access to finance for farmers and agribusinesses in Ghana. The MFA provides training, technical support and incentives for financial institutions to increase lending to farmers and agribusinesses – so as to boost production, invest in processing and expand their businesses.
“We were able to repay the loan in six months, and then applied for another to acquire inputs and increase the number of acres cultivated to over 500 in 2022,” said Wiafe. “Financing from Summit Vision has been very helpful. Getting grafted seedlings has reduced the cashew gestation period from about five to two years.” (Grafting one plant’s stem, root or branch onto another can also improve crop resilience against pests or disease.)
“Also, young people in the district have seen the potential of cashew production and are no longer migrating to cities in search of jobs following poor cocoa yields.”
With the benefits clear to all, the Nkenkaasu Cashew Group is attracting more members and the district assembly is recommending Summit Vision Microfinance to other districts in the region to finance their cashew production. Summit Vision Microfinance is up to the challenge – offering support to train more youth and women cashew-grafters to meet demand for seedlings and secure long-term loans for farmers to maintain their farms.
Mr. Frank Osei Boadu, General Manager of Summit Vision Microfinance said: “Our partnership with the USAID-supported Ghana MFA has equipped our staff with skills and knowledge in agriculture-lending. In less than two years, we have increased our agriculture loan portfolio from 20% before our partnership with MFA to 29% with a 100% loan recovery rate”.