During the period April to June 2018, the 12 WAFM beneficiary agribusinesses, with support from WAFM obtained £1.31 million in financing from financial institutions to support their operations. The additional financing obtained was a result of the 12 beneficiary companies association with WAFM and also the technical assistance provided by the WAFM project staff.
Kedan Limited is an example. The company has been one of the beneficiaries of WAFM Challenge Fund since 2015. WAFM co-invested in Kedan to establish a 7000 metric tonnes per annum maize factory that will produce maize flour, fortified maize flour, maize grits and maize bran for local and West African regional markets. However, Kedan’s journey to matching the finance from WAFM was not been easy.
In 2017, Kedan Limited, made a request for a loan to one of the banks in Ghana, however, the bank was slow in processing the loan. When the bank got information in May 2018 that WAFM was co-investing in the Kedan’s new $1.2million maize processing factory, the bank got interested. Terry Lacey, WAFM Project Team Leader subsequently visited the bank with Eric Kissi, Kedan’s CEO to further explain WAFM Project and its relationship with Kedan Limited. The bank in June 2018 released the funding for Kedan.
“But for Kedan’s association with WAFM and the visit of Terry Lacey to the Bank to explain the project and the investment of WAFM, I don’t think Kedan would have gotten the loan.” stated Eric Kissi, CEO Kedan Limited.
Access to finance is often one of the top challenges cited by businesses in Africa. Even when finance is available, applying for these funds may be cumbersome for most businesses or the interest rate may be too high and perhaps the duration of the loan may be too short for the businesses to repay.
The access to finance challenge is even more severe for agribusinesses. Many traditional financial institutions-especially banks, consider agribusinesses too risky because most of agricultural production involves informal and smallholder farmers; is based on the unreliable rainfall pattern; and agricultural produce often do not have long shelf life. The lack of finance has affected food production and contributed to food insecurity in the West African region.
WAFM’s assistance to the beneficiary agribusinesses contributed to their success in obtaining additional financing. WAFM project team has been very instrumental in helping beneficiary agribusinesses to get finance including facilitating meetings between banks and agribusinesses helping both parties obtain and provide necessary information for credit.