The Solidaridad West Africa Project in Liberia has launched a loan program under its Liberia Cocoa Sector Improvement Program (LICSIP) to assist farmers in the cocoa sector.
Country Representative of Solidaridad-Liberia, Michael S. Toe said the launch of the ‘Revolving Loan Fund’ is intended to promote access to finance for cocoa farmers in order to improve incomes. He noted that with access to finance, smallholder cocoa producers can realize an expansion in production to develop their farming businesses.
The loan program was launched recently in Gbarnga, Bong County and approximately 2,000 farmers in the cocoa sector are set to benefit. Mr. Doe further clarified that the revolving loan is established for specific reasons. “This is meant to assist farmers to export and make them have alternative access to finance.
“Normally a revolving loan fund is a critical process in accessing funds. In such a program, we have managed to do the Village Saving Loan (VSL), whose borrowing rate is limited to what people can generate at the community level. This is intended to help expand the businesses of farmers,” he explained.
Agro-inputs dealer
Agriculture is the primary source of income for approximately 80 percent of Liberia’s population, according to the Liberia Institute of Statistics and Geo-Information Services (LIGIS). Even though many of the country’s population are involved in farming, agricultural productivity still remains low as a result of many challenges, including lack of access to finance.
However, farmers, agro-inputs dealers, exporters, and other small and medium enterprises (SMEs) that are operating in the cocoa sector will have access to loans for expansion purposes on a low-interest rate, according to Mr. Doe. He also mentioned that, based on the assessment by the financial institution, it is possible for a farmer to have a minimum of L$20,000 to L$55,000 depending on a farmer’s capacity. The loan program is expected to last between 3 to 12 months and when farmers pay on a timely basis it provides the opportunity for others to benefit.
“The interest rate is about 12%, while new farmers or people that borrowed will only pay back 6% interest rate. It is our expectation that between that time you should be able to pay back the loan,” he told the farmers.
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