Barry Callebaut, the world’s leading manufacturer of high-quality chocolate and cocoa products, IFC, a member of the World Bank Group, and IDH, the Sustainable Trade Initiative, start a risk sharing partnership of USD 9 million to cover over 103,000 smallholder cocoa farmers in Cote d’Ivoire by 2020.
Making farmers bankable
Barry Callebaut, with support from IFC and IDH, will provide in-kind credit to farmers in the form of inputs and farm services. After a few successful years, farmers will have a positive operational and financial track record and thus become bankable, making it possible for local financial institutions to provide loans directly to farmers, a giant leap forward for cocoa farm financing.
Training and agro-inputs
Two productivity packages will be provided directly to farmers and farmer cooperatives on a credit. The package provides training in pruning and crop protection and later on fertilizers to credit worthy farmers, with trees under 20 years of age. Both packages will be supported by on-farm by Barry Callebaut’s accredited agents trained on business management, agronomy and adult education.
Farmers get bank accounts
To receive the productivity package on credit, farmers are assisted in opening a bank account where they are required to save part of the package value up-front. The accounts are opened at Advans, one of the leading microfinance institutions in West Africa.
This will transform farmers into entrepreneurs with a positive operational, financial and profitability track record. Increasing the comfort of local and international financial institutions to independently invest in these types of high-impact programs.
Access to credit and training
IFC Director for Manufacturing, Agribusiness and Services, Alzbeta Klein said “This partnership will help farmers in Cote d’Ivoire gain access to credit and training that will enable them to upgrade operations and become part of a value chain linking them to cocoa buyers and global chocolate consumers.”
Joost Oorthuizen, Executive Director of IDH said “IDH is really excited about this step forward. By de-risking investments we will be able to amplify our impact at the farmer level. In this program we expect that by leveraging public funding with private sector contributions at a ratio of more than 1:10, 103,000 farmers will increase their bankability and ultimately the quality of their livelihood.”