DANIDA. Denmark’s development cooperation agency, has a longstanding commitment to the development of the agricultural sector in Burkina Faso, providing support since 1992. Building on this long-term engagement, Enclude is working with DANIDA to unlock economic potential all along the agricultural value chains in Burkina Faso through the implementation of the access to finance component of the Economic Growth in the Agricultural Sector Program (PCESA).
In Burkina Faso, the agricultural sector accounts for 30% of gross domestic product and employs 86% of the population. Agricultural development is thus key to reducing poverty in Burkina Faso – considering that 43.9% of the population lives under the poverty line, with production systems dominated by subsistence farming. Access to credit was identified as a critical barrier at the outset of the PCESA’s predecessor. To address this barrier, the new program included a technical assistance component to two major banks, which Enclude was selected to implement starting in 2014.
In 2016, after two years of initial assistance to the banks, we adopted a new approach leveraging local resources to transfer capacity to remote loan officers who are closer to the target beneficiaries. As such, our local consultants have been providing technical assistance to these loan officers through a series of three-week missions to rural branches to enable them to adequately prospect for and appraise loan applications of agribusinesses and cooperatives. Using a value chain approach, our local consultants also support rural loan officers in building their agribusiness portfolios.
Although the project is still under way, our efforts have been met with great satisfaction by the senior management of the partner banks, the rural branch managers, the loan officers, and stakeholders in the agricultural sector. Moreover, we are currently working on opening up investment channels to finance warehouse facilities so that agricultural cooperatives can store produce for longer, minimizing risks from market fluctuations, and boosting value chain growth. One of the partner banks has already expressed interest in offering warehousing finance products, and DANIDA plans to make this a core component of the second component of the PCESA project.