Freshmacs Ghana Limited, Fiaso Cassava Farmers Association and Dotobaa Cassava Farmers Association Cassava/Gari Value Chain

Introduction

The project supports production and processing of cassava into gari by Freshmacs Ghana Ltd (FGL) together with two outgrower groups namely: i) Fiaso Cassava Farmers Association (FCFA), and ii) Dotobaa Cassava Farmers Association (DCFA) through the National Investment Bank (NIB).

The project is located in Fiaso and Dotobaa in Techiman and Nkoranza districts, respectively, in the Brong Ahafo Region, and involves 125 Outgrowers for cassava production.
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cassava farm under the Cassava/Gari Scheme

Purpose

The facilities will be utilized as follows:   

      

For FGL:

a)      Procure tractor and equipment to service its own farm and those of the Outgrowers;

b)      Establish and maintain 225 ha of cassava farm, and process cassava tubers from its own farm and those of the Outgrowers into gari for export to Europe.

For the FCFA & DCFA OUTGROWERS:

a)      Support 125 Outgrowers to establish and maintain 125 ha of cassava farms.

Tenor/Loan Repayment

The tenor and repayment terms of the NIB/OVCF Term Loan are as follows:

 

For FGL

The medium term loan shall be repaid by monthly installments over a period of sixty (60) months with eighteen (18) months moratorium on both principal repayment and interest payment.

 

For FCFA & DCFA

The medium term loan shall be repaid by 15 months’ installments over a period of sixty (60) months with fifteen (15) months moratorium on both principal repayment and interest payments.

The Outgrowers shall be entitled to receive repeat loans once they repay their facilities as scheduled.

Pricing

The interest on the loan from the Fund to NIB for FCFA and DCFA shall be charged at Bank of Ghana (BoG) Policy Rate of 19% less 3.5% concession, i.e. 15.5% per annum for the Outgrowers. On the other hand, the base rate for the TO shall be BoG Policy Rate of 19% less 2.5% concession, i.e. 16.5% per annum.

The interest on the Loan from the NIB shall be charged at the rate of 22% per annum to the Outgrowers, and 23% per annum to Freshmacs Ghana Ltd (TO). This means that the Bank shall charge a margin of 6.5% per annum on the loan to both clients.    

 

The interest rates would be reviewed annually at the beginning of the year, based on the prevailing economic conditions including the Policy Rate of Bank of Ghana.

Justification

  • The project is located in rural areas in the Techiman and Nkoranza districts in the Brong Ahafo Region. The inhabitants are mainly farmers and generally disadvantaged. Therefore the project is meant to reduce poverty through increase in outgrowers’ incomes;
  • The projections in the project were based on bankable and commercially viable business plan at the TO level;
  • Marketing opportunities exist for Value Chain products both in domestic and foreign markets;
  • The project employs 35 farm workers and 17 factory hands. The gari processors at the Good Practice Centre number about 50 and receive a tolling fee of GHS409 for an output of 1.5MT of Gari produced from about 4.5MT of fresh cassava tubers (i.e. cassava : gari conversion ratio of 3:1).

Some Photos
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The Fund Management Team meeting with the Dotobaa Cassava farmers  

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Cassava tubers at the Good Practice Centre under the Cassava/Gari scheme

 
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