A supplier credit guarantee helps everyone on the agro value chain

To understand what Julius and Sarah Towo set out to accomplish when they opened their business in 1992, you have to know some KiSwahili.

Rafiki Kilimo translates as agricultural friend, which is what Rafiki Kilimo Agrovet wanted to be to farmers in Tanzania’s Kilimanjaro region. Their mission: to support farmers in increasing their yields through the use of high-quality, affordable fertilizer that is easily available to them.

Rafiki Kilimo has become one of the largest fertilizer distributors in the area. But to take their family business to the next level, they needed a little help from their friends. And in 2013, at a workshop in Arusha, that’s what they found in AFAP.

“I was very excited to find there was an organization which had come to support the private sector, something that is very rare,” says Mr Towo.

AFAP helped Rafiki Kilimo with a supplier credit guarantee, enabling the business to acquire fertilizer on credit from suppliers and repay them within 60 days. In turn, they extended credit to their network of rural-agrodealers and small-scale farmers.

“Rural-agrodealers and my network of farmers have benefited a lot from the AFAP credit guarantee support I have received,” says Mr Towo.

Rafiki Kilimo also employs an agronomist – something that has improved business as well.

“Having the knowledge on the right use of fertilizer has always been a challenge in Tanzania,” he says. “An agronomist helps us to ensure that we not only sell fertilizer and other inputs to farmers but also give them much-needed advice on the appropriate use of fertilizer.”

With AFAP assistance, which included a grant to build a warehouse for storage, fertilizer sales have increased from 978 tons to 4,330 tons, and profits have doubled, going from 15 million Tanzanian shillings to 30 million.

“This partnership has helped everyone along the value chain,” says Mr Towo. “I get more profit and farmers also benefit through improving their yields.”