Increasing Women’s Agricultural Enterprise through Tiered Banks

Women in rural Ghana grow their business, build healthier families and create more resilient communities with access to banking.

Agnes Atayila and the other members of Yineme, an all-women’s maize and rice aggregation, 13-member group in the northern Ghana city of Bolgatanga, had the desire to expand their business and increase production during each harvest season to improve their livelihoods. To achieve these goals, the women needed additional capital to buy more crops and pay for storage, but could not qualify for loans from banks, which required clients to have collateral, such as land.

“Women in Northern Ghana do not own land,” Atayila, the group’s leader, said. “So we have to engage in value chain activities like grain aggregation to earn income to feed our families and meet personal needs.”

Feed the Future recognized that women-owned businesses, such as Yineme, drive rural economies. And by helping them gain greater access to land, finance and other productive inputs, they could ultimately grow their businesses, build healthier families, and create resilient communities.

That’s why Feed the Future encouraged the local Builsa Community Bank (Bucobank) to launch a loan product for women-led agribusinesses. For this new loan product, Bucobank reduced its interest rate from 35 percent to 30 percent, waived processing fees, and accepted social guarantees instead of physical collateral from female-led enterprises. Yineme was able to access a Bucobank working-capital loan of nearly $5,000 to change the course of its business. In 2015, the loan allowed Yineme to purchase 18.4 metric tons of maize and rice from local farmers — nearly triple the 6.5 metric tons they purchased in 2014 — and its profits increased 60 percent. Even now, as Yineme grows its business, it is also putting more money in the pockets of farmers like Agnes, whose grains they purchase.

Bucobank wasone of 33 financial institutions that participated in the USAID Financing Ghanaian Agriculture Project’s (USAID-FinGAP) pay-for-performance grant incentive program. USAID-FinGAP facilitates financing and investment for agribusinesses working with maize, rice and soy in northern Ghana. As a grantee, Bucobank received technical assistance, capacity-building training and pay-for-performance grants to encourage increased lending to the agriculture sector, including to women-led enterprises like Yineme and Azue-Yeri Women’s Group, another maize and rice aggregation group. The more lending Bucobank conducts, the more grant money they receive, creating a cycle that allows them to offer loans to additional agribusinesses. In less than two years, the loan amount to women-led agribusinesses like Yineme increased by 60 percent.

“Financing from Bucobank has changed our living standards,” said Grace Amaka, leader of Azue-Yeri. “We used to depend on our husbands for all our needs, but now we are able to cultivate our own fields and aggregate about three metric tons of paddy rice for sale to processors for income to cater to our needs and that of our children.”

The success of Yineme and Azue-Yeri are just two examples of how access to simple financial products like those provided by Bucobank and the USAID-FinGAP program can change the lives and futures of families across Ghana.

Supported by Feed the Future, USAID-FinGAP provided a comprehensive and integrated approach to financing actors and increasing competitiveness in the maize, rice, and soy value chains in northern Ghana. Through incentives, training, and technical assistance, FinGAP built the capacity of financial institutions and business advisory services providers to facilitate private finance and investment to thousands of micro, small, medium, including large enterprises in the target value chains, with a focus on women-led enterprises. As a result of the project’s involvement, financial institutions and business advisory services providers are reducing loan processing time, increasing the likelihood that funds are approved, and building trust and cooperation between actors, enabling the financial sector to engage more deeply in agriculture.