ACA Facilitates Financing for Cashew Processors through Partnership with Ecobank and NEXIM
A breakthrough in access to finance was announced on March 1st by the African Cashew Alliance (ACA), the USAID West Africa Trade Hub, and African Investors Management Services Ltd (AIMS). A Memorandum of Understanding with the Nigerian Export Import Bank (NEXIM) and Ecobank will facilitate access to US$2 million in financing for three Nigerian processing firms, which will lead to dramatic increases in processing capacity and create hundreds of jobs in the Nigerian cashew sector.
The three processors (ACET, Abod Success, and KD Foods) are members of the Nigerian Cashew Cluster Finance Scheme (NCCFS), a group of processors who operate jointly in specific areas of shared interest, including financing requirements, transaction finance, and raw materials sourcing. Following a successful partnership with NEXIM in 2011 that brought more than US$600,000 of financing to the processors, the MOU marks the introduction of Ecobank’s participation in the scheme.
The addition of a commercial bank in the partnership is essential. Ecobank will complement NEXIM’s funding by efficiently facilitating transactions including collections, bridging finance facilities, and fund transfers. This will improve the ability of the processors to meet their buyers’ quality, quantity and delivery specifications in a timely manner.
As part of the agreement, ACA will act as Technical Partner, providing technical assistance and business advisory services to the cashew processors. ACA experts train staff in financial management and operational best practices, ensuring the funds received through the financing scheme are used as effectively as possible. AIMS Ltd is the representative of the USAID West Africa Trade Hub finance team in Nigeria. AIMS Ltd will sign as primary facilitator of the scheme.
By 2016, the Financing Scheme hopes to enable a 6,000MT increase in processing capacity, representing nearly 1,000 new jobs and $5 million in additional income in the local economy. Almost 8,000 farmers have already seen improved livelihoods from the program.