FINANCING UPLIFTS GHANA'S POULTRY FEEDS VALUE CHAIN

The advisor supported small and medium-scale poultry farmers in Ghana to realize their growth plans by providing access to affordable financing. The initiative aimed to expand the operations of a non-profit organization comprised mostly of small and medium-scale poultry farmers, which had sought ways to expand its operations and produce enough chicken and turkey feed to meet the growing demands of its over 1,500 members and other poultry farmers across the country. The organization needed to expand its operations by increasing its feed mill capacity from 10 to 15 metric tons per hour, constructing a silo and office complex, and procuring raw materials, mainly maize and soybean, to process different feed mashes. However, the organization was reluctant to take a commercial bank loan due to high-interest rates. In April 2021, the organization connected with Tradeline Consult, a transaction advisor supported by the Feed the Future Ghana Mobilizing Finance in Agriculture (MFA) Activity. MFA is a USAID initiative working to make financing easier to obtain and more available for farmers and agribusinesses in Ghana. Through a network of transaction advisors, including Tradeline Consult and 16 partner financial institutions, MFA helps agribusinesses secure financing to improve commercial agriculture and contribute to food security and sustainable livelihoods. Tradeline Consult worked with the organization to explore affordable sources of financing, including the Outgrower Value Chain Fund implemented by the Government of Ghana with support from the Federal Republic of Germany through the KfW Development Bank. Tradeline prepared the organization to qualify for investment, supporting it in developing a business and financing plan, preparing the loan applications for multiple investors, and guiding it on loan repayment. The organization was successful with its applications to three financial institutions. Investing for Employment (IFE), funded by the German Federal Ministry for Economic Cooperation and Development (BMZ), approved the organization's grant application for a project expansion. To access the grant, the organization needed to provide a matching grant amount of $1.9 million, while IFE provided the remaining $1.9 million. With further support from Tradeline, the organization secured working capital from Absa Bank Ghana to procure raw inputs of maize and soybeans. MFA's financial facilitation will enable the organization to increase its poultry feed production from 10 to 15 metric tons per hour. The expansion will more than triple its direct employment and provide a ready market for over 12,000 smallholder farmers in Northern Ghana. The new feed mill, with a 15 MT per hour capacity operating two shifts a day, requires 52,416 MT of maize and 11,232 MT of soybean to produce 62,400 MT of feed per annum. This input requirement will provide a ready market for six major aggregators of maize and soy from an estimated 12,657 smallholder farmers (60% of whom are female) in northern Ghana. It will also increase the number of people directly employed from 125 to 530 by 2024.