Working capital financing helps shea women’s group bounce back after COVID-19 setbacks


COVID-19 had a strong negative impact on the Kusanaba Women’s Group in the Bawku West District of the Upper East Region.

The group won a significant contract to sell the shea butter they process, but the pandemic depleted their financial resources so they could not purchase raw shea kernel. Thanks to a rural bank with a strategic imperative to lend to more women and support from a local transaction advisor, the women were able to secure financing so they could supply their customer.

The Kusanaba Women’s Group is comprised of 500 members, mostly widows. They cultivate maize and groundnut on small parcels of land given to them by their husbands or heads of family. The yields on their parcels are not enough to feed their families throughout the year, so they aggregate shea kernel and produce shea butter to supplement their income.

They’ve been selling shea butter to cosmetics producers in Ghana, the United Kingdom, Canada, and the United States since 2018. But the outbreak of the COVID-19 pandemic set them back significantly.

“We could not process shea butter during the peak of the pandemic, so our output declined, and our savings were depleted,” said Portia Asumda, the Leader of Kusanaba. With limited finances, the group could not purchase enough shea kernel to produce the five metric tons of shea butter which a Canadian customer ordered in February 2021.

Kusanaba sought advice from SAHA Training and Consult, a transaction advisor supported by the Feed the Future Ghana Mobilizing Finance in Agriculture (MFA) Activity. SAHA supported the group with its loan application and provided guidance on a repayment strategy. Kusanaba was successful with its application to Toende Rural Bank and secured a working capital loan of $4,251.

The loan enabled Kusanaba to buy 34 metric tons of shea kernel during the season so they could meet their orders and produce more shea butter throughout the year. “The financing from Toende Bank was very helpful,” Portia said. “It helped us to pick up our business from the effects of COVID-19. We have now invested the profit made from meeting the order into a diesel generator to power our processing machines and mill our grains for meals at home. We have also been able to connect water to our processing center to properly clean our raw materials for processing.”

MFA’s pay-for-results (PfR) incentive and training programs offered Toende the boost it needed to expand lending to agricultural enterprises, including women’s groups like Kusanaba. MFA’s partner financial institutions with PfR grants pledge to increase their agricultural loan portfolios and receive incentive awards upon meeting their expanded financing targets.

In 2021, Toende provided $373,074 of financing to 66 women’s groups in the Bawku West District. Toende’s partnership with MFA helped the bank realize its new strategy to increase financing to female-led enterprises including small-scale producers and processors such as the Kusanaba Women’s Group through financial literacy training and integration into the formal financial sector.

“Participation in the MFA PfR incentive grant and training programs influenced our decision to increase agricultural lending in 2021 by 100% with over 70% loans disbursed to women-led agribusinesses and groups within the target value chains,” said Lincoln Winimi Peedah, Toende Rural Bank’s credit manager.”

MFA is a USAID-supported Activity that is working to make financing easier to obtain and more available for farmers and agribusinesses in Ghana. MFA recognizes that financing for agriculture will stimulate the growth of farming infrastructure, increase the country’s food security, and create sustainable livelihoods for the community. Through PfR incentives, technical assistance and training, MFA is linking investors, transaction advisors, and the agribusiness community for financing to improve commercial agriculture in Ghana.

The women of Kusanaba repaid their loan in February 2022. Encouraged by the experience, the group plans to apply for a second loan to aggregate maize, soybean, and groundnuts for sale as they wait for the shea kernel season to purchase more raw materials for processing. The group also plans to revive and expand its five-acre shea plantation to ensure the sustainable supply of raw materials for processing.

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