Extension of the AFC project for GIZ ProDRA in Togo until 2020

14.11.2018

The core problem of the Togolese agriculture, as identified by the German Development Agency (GIZ), is that there is a lack of technical and economic efficiency in the agricultural value chains. To tackle this issue, the project Rural Development including Agriculture (ProDRA) is active in four components:

  • Component A promotes the selected agricultural value chains (coffee/cocoa, cashew, pineapple). It focuses on the development of economic structures by establishing better organizational structures and contractual forms and by introducing new techniques. The areas of market based production and protection of self-sufficiency are linked.
  • Component B deals with the establishment and support of rural enterprises and MSMEs as parts of the value chain.
  • In component C - which is conducted by AFC - financial services adapted to the conditions of small scale agriculture are developed in collaboration with financial service providers (FSP).
  • Component D provides advices on the political and planning decisions of the Togolese government.

The component C, with regards to Financial Services, has been successfully implemented by AFC since May 2017. In October 2018, the existing mandate has been extended, whereby ACF will pursue its contribution to the ProDRA for another two years, until the end of October 2020.

This extension is a logical continuation of the previous work. In the previous period, tailor-made financial services were developed in cooperation with FSP. The products that have already been successfully launched will be further developed during the extension phase. In line with the focus of the overall project on the processing of agricultural products, our activities are centered on medium-term investment credits for production and transformation.

“Crédits de Campagne" for pineapple producers have already been running for 24 months and small tractors were also financed during this period. However, in the area of processing, larger loans exceeding the FSP sectors are needed and require new partnerships. Cooperation with cooperatives and FSP will continue, while a dialogue with commercial banks in connection with investment loans will be engaged.

Overall, the communication between financial service providers and smallholders is being reinforced in order to further strengthen the FSP confidence in the clients’ repayment capacities, thereby increasing the willingness to lend to the agricultural sector and the provision of other sustainable financial services (e.g. savings programs) including in rural areas. The protection of farmers, SMEs and their affiliated households shall be strengthened by adapted savings and insurance products.

Together with the other components of the project, the activities will also be transferred to new value chains. Equivalent intervention points and activities will be established with regards to sustainable business promotion.

While ProDRA works exclusively on pineapple value chain, and increasingly focuses on fruits (including turmeric, essences, etc.), our AFC team monitors in parallel the development of credits for Cashew nuts. An exit strategy from the cashew nuts value chain ensures that sufficient capacity is available for these functions in the new value chains and for the processing.

For further details please contact Jakob Lutz ( ).