During each cashew marketing year, producers, processors, traders, farmers, and other actors in the cashew value chain seek funds to finance that year’s cashew campaign. Most of these actors do not have the necessary funds or guarantees to be able to apply for a loan at the bank level. In addition, most banks are afraid to invest in the sector because of the associated risks, and the unknown potential among actors.
Since 2017, the U.S. Department of Agriculture and Shelter for Life International have been implementing the LIFFT-Cashew Project (Linking Infrastructure, Finance and Farms to Cashews). This project takes place in Senegal, the Gambia, and Guinea-Bissau (otherwise known as the “SeGaBi” region). The Project works to enhance the cashew value chain in the region for farmers, cooperatives, producers, end-buyers of raw products (exporters), and end-buyers of locally processed products (foreign buyers).
The COVID-19 pandemic has had a serious impact on the cashew market, negatively impacting both the quantity of Raw Cashew Nuts (RCN) produced and sold, as well as the quantity of funding supplied to actors along the cashew value chain to continue their operations effectively. The LIFFT-Cashew Project has been working with project partners to address financial constraints by providing small loans, financial management training and facilitating financial partnerships.
One major partnership that was successfully developed through the LIFFT-Cashew Project was with the General Delegation for Rapid Entrepreneurship for Women and Young People (DER/FJ) and the Bank for Economic Development (BNDE). Through this partnership, The LIFFT-Cashew Project will continue to facilitate further connections and relationships with cashew actors that foster financial benefits in the region. In the Sokone zone, for example, the LIFFT-Project is able to bring together opposing organizations (such as the processing company KOR ET FRÈRES and the Federation of Cashew Nut Providers and Planters (FPPA) of Fatick and Kaolack) to seek financial assistance and receive capacity-building training in financial management and other topics. These types of interactions are important for the region and promote transparency and cooperation.
The LIFFT-Project facilitates and negotiates financial activities that are being initiated locally as well. For example, in efforts to help save the 2020 cashew season in Senegal, the DER/FJ granted funding of 6 billion CFA francs to support the cashew nut industry. This grant funding was made possible from pooled funds of the DER/FJ, the BNDE, Pamecas, and Crédit Mutuel de Senegal (CMS). Unfortunately, the two major processors, KOR ET FRÈRES and FPPA, had applied for funding through the DER/FJ grant, but their location in the Sokone Zone of Senegal made them ineligible to receive funds.
The LIFFT-Project was able to work with DER/FJ to negotiate the terms of grant eligibility and expand the requirements to ensure more entities receive funds. This is especially important during the COVID-19 pandemic. Thanks to the LIFFT-Cashew Project facilitation, now all applicants in the Sokone Zone are eligible to submit and receive funding (including KOR ET FRÈRES, FPPA, Dab akh Enterprise, and the Women Transformers). As a result, an initial funding of 20,000,000 CFA francs was granted to the Sokone Federation of Women Transformers. Additionally, KOR ET FRÈRES established a financing agreement with the DER/FJ for the construction of its processing unit.