Status update — February 29, 2016

African Connections’ partnership with Kiva has been closed. This decision was reached by both both parties following closure of this organization’s credit program which was supported by Kiva funding.

African Connections was approved as an experimental partner in April 2014, with the purpose of financing farmers in the Northern and Brong Ahafo regions of Ghana. During this period, 300 farmers were financed through multiple funding sources including Government supported SADA loans. Out of the 300 farmers who received funding, 33 farmers were funded by Kiva with loans worth $50,675. Loans helped farmers with inputs and labour costs, with loan repayments tied to the crop harvest after 9 months. However, the loan program failed as the farmers did not repay their loans to African Connections as expected. Some of reasons for the failed repayment included poor crop yield and an unfavourable political climate to enforce payments. The district elections were on-going at the time and there was lack of goodwill by local leadership to help in pushing for loan payments, particularly the government supported SADA loans. This ultimately affected payment of Kiva funded farmers, as they received funding within the same region. Kiva allowed African Connections to pursue repayments for another year following the original term, but nothing has been recovered to date.  

Given the passage of time, all the 33 loans worth $50,675 were defaulted in October 2015 and no further recovery is expected from these loans. 

Partner Description:

African Connections Ghana Limited is a limited liability company that with its affiliate company African Connections Growth Initiatives (ACGI), a not for profit, develops and implements environmentally friendly agriculture initiatives to increase yields and improve smallholder incomes, while also improving food security and nutrition levels.  

African Connections trains smallholder farmers and helps them increase profitability by strengthening agricultural productivity, improving farm management skills, linking farmers to microfinance, increasing connections to market and helping develop supply chains. 

In accordance with best agricultural practices, its team of experts provides hands-on training to farmers to identify and cultivate crops that have high market demand, such as maize. Farmers are trained to produce in commercial quantities and to produce to meet global standards and market specifications. 

African Connections integrates these smallholders into supply chains by linking farmers to local, regional, national and international markets. 

A unique lending approach:

African Connections Ghana Limited runs an input credit program targeting maize farmers that has been running since 2012.  Participating farmers form groups with 10-15 members, and agree to be liable for other members’ loans in the event of non-payment.

These loans cover the cost of seeds, fertilizers and equipment. In order to access a loan, a farmer must undergo agricultural practices training, and adopt the training on his/her farm.

African Connections plans to allow farmers to make up for maize shortfalls by paying back using other cash crops such as peanuts or rice (AC would not seek to collect crops intended for use for household consumption).