Financing Ghanaian Agriculture Project (USAID-FinGAP) Quarterly Progress Report #9, January 2016

The project addresses a key constraint that restricts the development of commercial agriculture in Ghana: access to finance necessary to enable investment in agricultural value chains. USAID-FinGAP uses a mix of technical assistance (TA) and financial incentives to unlock financing for commercial agriculture development in the maize, rice, and soy value chains in the north of Ghana. In the quarter from October to December 2015, USAID-FinGAP's incentive strategies generated surprising results in terms of mobilizing private capital toward key actors within the Feed the Future value chains of maize, rice, and soy. The project facilitated finance and investment worth $20,645,214 in private capital to value chain actors, contributing to a cumulative total of $63,320,917 in financing released to small, medium, and large enterprises (SMiLEs) to date. This quarter's financing released constitutes 18% of the total capital directed to the target value chains to date. USAID-FinGAP significantly increased the number of female-led SMiLEs directly receiving finance from the project this quarter. A total of 82 female-led SMiLEs received $372,351 in finance, constituting 45% of the cumulative total of 181 female-led SMiLEs that have directly received loans or investment since USAID-FinGAP's inception. The project's incentive strategies and training are facilitating finance and technical assistance to a wide range of actors within the target value chains, including smallholder farmers and micro actors, as well as larger scale enterprises. The project team focused on three key strategic activities this quarter: increasing deal flow, ensuring smooth implementation of the Participating Financial Institution (PFI) incentive grant, and capital markets development through encouraging alternative sources of financing for SMiLEs. USAID-FinGAP identified 30 new SMiLE agribusiness investment opportunities and 15 public-private partnerships this quarter. The project team also coordinated closely with PFI partners to ensure that all financing released was in line with grant requirements and that PFI grant ceilings were being met. Efforts to expand the provision of finance beyond traditional bank loans to alternative sources of finance, such as listing SMEs' debt or equity securities on the Ghana Alternative Market (GAX), were also expanded this quarter. The USAID-FinGAP team began to utilize its Business Advisory Services (BAS) provider network to encourage such listings, and established a subcontract for new financial and legal advisors to list SME securities onto the GAX. An international equity investor also reached out to the FinGAP team this quarter requesting assistance to identify potential equity investment targets in Ghana seeking capital between $500,000 and $2 million in a debt/equity mix.