AFAP credit guarantee to North Gate in Ghana
The African Fertilizer and Agribusiness Partnership (AFAP) Â has joined forces, and resources, with North Gate Agro Products Enterprise, a fertilizer distribution company based in the Brong Ahafo region of Ghana. The joint mission will work toward the increase fertilizer distribution by an estimated 11% Â during the 2013 Ghana farming season.
In September 2013, the two organizations signed an Agribusiness Partnership Contract (APC) that will enable them to boost fertilizer usage in the region by offering and extending credit to distributors, suppliers and smallholder farmers along the value chain.
Elizabeth Dwamena, owner and CEO of North Gate said: â€œPeople donâ€™t always have the money to buy farming inputs such as fertilizer in time for the farming season”. Â Dwamena added that one of the feasible ways to encourage fertilizer usage at the appropriate time is to extend credit over a period of time which allows people leeway to pay when they can.
“Most of the time you hear people talk about not having enough moneyto buy fertilizer, but through the credit system, we enable them the opportunity to buy fertilizer and other inputs and pay at a rate that suits them,” she said.
The APC will be a credit guarantee that AFAP extends to suppliers of fertilizer to enable them to extend credit to distributors, retailers or stockists down the fertilizer value chain. With this risk mitigation tool, the suppliers can either extend credit to customers who would normally not get or they can extend the account payable cycle from say 30 days to 90 days.
Jason Scarpone, AFAPâ€™s President and CEO said, â€œNorth Gate presents an opportunity Â of supporting AFAPâ€™s goal of increasing fertilizer supply and reducing cost, because of their wide reach and commitment in Brong Ahafo.â€
â€œMost often farmers are unable to pay for their fertilizer needs. Similarly, some retailers are unable to come up with sufficient funds to pay for their inputs,â€ Scarpone said.
North Gate will extend input credit to organized farmer based organizations and credible retailers, and increase fertilizer distribution, through its network of 44 agro-dealers to over 25Â 000 smallholder farmers.