In West Africa’s Sahel region, smallholder farmers have long grappled with the challenge of accessing affordable credit. For these farmers, timely access to credit isn’t just a financial matter; it’s a lifeline that ensures they can purchase essential agricultural inputs to cultivate their land, helping them generate income through sales, and meet household food supply needs. In Burkina Faso’s financial sector, financial facilitators play a pivotal role in providing businesses access to affordable credit as they assist them in navigating the complex loan application process and securing much-needed financing to fuel their activities. This is done by helping them identify financial institutions, prepare loan applications, as well as monitor loan implementation and disbursement to obtain investment or/and additional financing.
Recognizing this critical need, the USAID CATALYZE Finance for Resilience (F4R) Activity works with financial facilitators to enhance access to financing for micro-, small- and medium-sized enterprises (MSMEs) within the agricultural sector. By developing a network of Financial Facilitators (FFs), CATALYZE F4R strengthens market linkages and networks between financial institutions and businesses in need of affordable finance. USAID CATALYE does this by employing a Pay-for-Results (P4R) mechanism that financially incentivizes both financial institutions and financial facilitators to mobilize private capital in target geographic regions and economic sectors, with the goal of improving the livelihoods and food security of local communities, with financial facilitators further incentivized for increasing lending to women- and youth-led MSMEs.
Jean Frédéric Assodan, a financial facilitator with deep ambition, expertise, and a network of reliable contacts in the banking and microfinance sectors, joined CATALYZE F4R as an emerging financial facilitator in October 2021. With eight years of experience providing technical assistance to businesses, such as drafting business plans, providing training and management tools, coaching SMEs, and securing finance, Assodan has facilitated financing for numerous clients. Many agri-MSMEs find it difficult to secure loans to grow their businesses due to high-risk perception and lack of collateral. Drawing from his previous experience from La Maison de l’Entreprise Burkina, an association that aims to provide private sector players easy access to various services in one place and fosters synergy among financial actors and support organizations, Assodan dedicated himself to understanding the specific needs of MSMEs and analyzing their financial situations. Using his contacts within banks, microfinance institutions, and CATALYZE F4R’s network of financial institutions, he was able to find financial partners willing to finance loans for clients.
During his participation in the CATALYZE F4R Activity, Assodan facilitated the distribution of $542,459 of capital to 71 MSMEs in the Burkina Faso agricultural sector. This financing not only helped sustain these MSMEs but has also propelled their growth trajectory and profitability.
Assodan visiting members of the Provincial Union of Cowpea Producers in the Center North region of Burkina Faso. Assodan visits with his clients to better understand their loan needs. Photo: USAID CATALYZE
Financial facilitators add real value by helping businesses obtain the financing they need to grow and succeed. Using the pay-for-results incentive model, CATALYZE F4R is incentivizing emerging financial facilitators to help agri-MSMEs access affordable credit. As a result, these MSMEs can invest in their businesses, ultimately leading to increased agricultural productivity and food production. This enhanced productivity contributes to greater food security in the Sahel region by strengthening local food systems, reducing dependency on imports, and ensuring a more reliable food supply for communities. Since launching its Emerging Financial Facilitators network, CATALYZE F4R has helped to mobilize more than $3.6 million to 184 MSMEs in Burkina Faso.
This article was originally published by USAID CATALYZE.
