Strategic financing spurs young smallholder farmers to expand


A 25-year-old smallholder farmer at Saala in the Gushiegu District of Northern Region, Abdulai Yakubu, saw remarkable growth in his maize and soyabeans production thanks to affordable financing support.

As a member of the Saala-based Wumpini Village Savings and Loans Association (VSLA), Yakubu doubled his maize and soyabeans cultivation area from one acre to two acres in the 2022 production season, showcasing the positive impact of accessible financial resources on smallholder farmers.

Abdulai Yakubu inspects his soyabean plants

In the seven years prior, he had only cultivated half an acre each of soybean and maize. Like many farmers in hard-to-reach communities in northern Ghana, a lack of financing prevented him from procuring improved seeds, fertilizer and tractor plowing services translating into low yields, reduced productivity, and limited incomes.

To address this ongoing challenge, the USAID-supported Feed the Future Ghana Mobilizing Finance in Agriculture (MFA) Activity, in partnership with the Rural Development Fund (RDF), implemented a VSLA loan scheme to make affordable financing available to base-of-the-pyramid value chain actors who need small amounts of financing to enhance crop production and aggregation.

The strategic partnership promotes financial inclusion for farmers like Yakubu in the formal banking sector and provides them with training in financial literacy and good agricultural practices.

The first phase of the VSLA loan scheme included a disbursement of US$28,409 to 304 agribusinesses in Ghana’s North and North East Regions meant to expand their farming and aggregation during the 2022 production season.

Through this scheme, Yakubu received a loan that allowed him to pay for tractor plowing services on his two-acre farm and to purchase weedicide for his soybean crops.

“For the first time in my seven-year farming career, I received a loan from a bank. Before, I depended on my savings, which were not sufficient to pay for inputs and tractor services,” Yakubu said. The financing enabled him to access inputs and plowing services leading to the harvest of 19 bags of soybean from his farm, generating US$862.85 in income compared to just three bags the year before which fetched only US$159.09.

Abdulai Yakubu on his maize farm

At the end of the 2022 production season, members of the Wumpini VSLA successfully repaid their loans, including Yakubu, qualifying 21 members—six men and 15 women— for follow-up financing of US$2,152.58 through the 2023 production season. That time round, Yakubu accessed another loan to expand his farm from two acres to five (two acres of soybean and three acres of maize). Between January 2023 and April 2024, RDF disbursed US$41,119 to 379 agribusinesses including smallholder farmers.

“The RDF-VSLA loan has increased my interest in agriculture. I never expected to cultivate a five-acre farm on my own, but the loan has made it possible. I am planning to further expand my production in the future,” Yakubu said.

Thanks to the increased income from his newly expanded farm, Yakubu can now also contemplate pursuing a post-secondary education, something he could not do after finishing high school because of financial constraints.

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