A New Digital Information System in Senegal Bringing Together Agricultural Actors
How does ICCO Cooperation’s STARS program develop more business opportunities for over 24,000 sesame farmers in Burkina Faso? By building the capacities of farmer cooperatives and microfinance institutions and by bringing these two separate worlds together. The case of farmer cooperative ADEP is an illustration of how exactly that works in reality.
Financial Inclusion in Burkina Faso
In Burkina Faso, people don’t have the habit to go to the bank and take out a loan. This is especially true in rural areas, where only 14 per cent had an account with a financial institution in 2014. Only five per cent of that group took out a loan to invest in their farm activities. To help change that, the government of Burkina Faso adopted the National Strategy of Inclusive Finance in 2019.
Capacity Building Cooperatives
To support the government of Burkina Faso to reach their goals, ICCO Cooperation’s STARS helps farmers in Burkina Faso to access markets and finance by strengthening the capacities of six partner microfinance institutions (MFIs) and 18 partner producer organizations. STARS supports MFIs to develop tailor-made loan products for farmers by using a tool called A-CAT; by introducing a risk management program for its partner MFIs; by facilitating business relations between partner producer organizations and MFIs and by building the professional capacities of these producer organizations.
The Case of ADEP
To illustrate how STARS helps cooperatives to strengthen their capacities, let’s travel to the Gnagna province, about 200 km east from the capital Ouagadougou. This is where the cooperative ADEP (Association pour le Développement des Entrepreneurs Pacifiques) is located. STARS developed a partnership between ADEP and the MFI GRAINE. This partnership enabled ADEP to benefit from a support of the MFI of USD 3,500 for inputs for the benefit of its members two years ago.
Last year, the producer organization received a second loan of USD 40,0000 for the production of conventional sesame. According to Lankoandé Yénubua, president of ADEP: “This has enabled our farmers to increase their production, as well as their yields from 400 Kg/ha to 600 Kg/ha. The producers increased their income and their enthusiasm for the production of sesame. This credit has also helped to strengthen confidence between ADEP and its members on the one hand, and between ADEP and the MFI on the other hand; because we repaid 100 percent of our loan on time.”
According to Karim Zoné, ICCO Cooperation’s STARS Value Chain Advisor: “ADEP is a young organization compared to other organizations of its size. STARS provided them with technical support, such as training on sesame production, the safe use of pesticides, harvesting and post-harvest techniques. We also offered business management training (GERME modules) and B2B meetings. The organization has also received support for the development of their own business plan. The effects? The organization has increased the quantity of sesame sold collectively and members improved their yields. Farmers now see sesame farming as a profitable business.”
For Fanupiari Dayamba from the village Garpieni: “It was my first time to access a credit. Before, I didn’t invest in sesame cultivation and also I didn’t know how to access a credit. On my 1.5 ha that I cultivated, I only harvested about 200 kg of sesame. When I took the credit of 170 USD, it allowed me to buy 2 bags of fertilizers, pesticides and 1 sprayer that I used to cultivate my land. At harvest, I got 700 kg of sesame which I sold for 720 USD. With this money, I was able to pay my children’s school fees, buy a motorbike and also cover the expenses of my small needs,” she says.
“When ADEP applied for a second loan the next year, they performed a profitability analysis using GERME tools. The conclusion was that this loan would not be profitable and they decided not to take it. Instead, they mobilized an equity fund among their leaders which enabled them to aggregate sesame from their members. I think this example shows a great maturity from this organization. It shows that they were not ready to just take out a loan, but they could properly analyze the pro’s and con’s and make an informed decision,” Karim Zone says.
As part of diversifying their income, ADEP also started to produce organic sesame, in partnership with the company Bioprotect, as part of ICCO Cooperation’s ‘Innovating for Impact of Sesame in Burkina’ (IFIS) project. Thanks to this partnership, the cooperative members accessed organic inputs and received a prepayment for the collection of sesame from Bioprotect. This enabled ADEP to easily collect conventional sesame from its members and to organize group selling through WhatsApp.
Mr. Lankoandé, President of ADEP: “Thanks to the support of ICCO, we were able to acquire a loan that had a positive impact on the production and returns of our members; our facilitators also received training to monitor the use and repayment of the loan. Our know-how in credit management has therefore improved and we can more easily render services to our members. If the relationship with the MFI is consolidated, we will achieve the financial empowerment that is essential for the strengthening of production activities for the benefit of rural producers.”
Extending Services to all Members
According to Karim Zone: “The next challenge for the PO will be to extend access to production credit to all its members. In addition, the PO must ensure that it has firm purchase contracts with customers, which would facilitate its access to a fund for collection from MFIs,” Mr. Zone adds.
This ADEP experience was shared with by all partner cooperatives during the STARS 2020 planning workshop. Sharing lessons and experiences encourages other producer organizations to strengthen their performances. To date, STARS helped almost 60,000 farmers in Burkina Faso to access a loan product and to invest in their farms.