Access to credit improves cocoa production in Liberia

Cocoa farmers in Liberia are increasing cocoa production through affordable microcredits they are securing to invest in their businesses under a revolving fund. This forms part of a sustainability plan to augment cocoa production in the country, which in turn will improve farmers’ livelihoods.

Cocoa smallholders in Liberia receive microcredit

This intervention is delivered by Solidaridad, which is implementing the Liberia Cocoa Sector Improvement Programme (LICSIP) with co-funding by the European Union. 

As part of the programme, an expected more than 3,000 farmers will have access to credit with a comparatively low-interest rate of 6% and a lending period of up to 12 months. DIACONIA MID, a microfinance lending agency that supports small and medium businesses, manages the fund. 

Speaking at a symbolic loan disbursement event, Solidaridad Country Representative in Liberia Michael Slewion Doe said conventional financial services providers are mostly unwilling to lend to cocoa farmers because of the high risk associated with the production of the commodity. The revolving fund, he said, was set up to help farmers access credit at a rate far below commercial interest rate so they can make the much-needed investments in their farms.

He indicated that the fund will complement the Village Savings and Loans Association (VSLA) scheme, which the farmers are already benefiting from.

Access to funds under VSLAs is limited as only a small amount of savings is mobilized among the beneficiaries. This makes it difficult for cocoa farmers to receive enough funds from the association to support their farms. With increased access to credit under this revolving fund, farmers can now make better investment decisions and get the most out of their hard work.

Michael Slewion Doe, Solidaridad Country Representative in Liberia

Martha Luogon, an elderly recipient in Yarnonnoh in the Nimba county, said the loan came at a time when cocoa farmers were finding it difficult to carry out maintenance on their various farms. 

“It is difficult for an old woman like me to undertake the arduous farm maintenance activities.  With this loan, I can now hire the services of youths in the community to carry out weeding, pruning and other services that I cannot perform by myself,” she said.

Naomi Nahn, a 31-year-old cocoa farmer who lives in Gaiyea in the Bong county, said she will use the money she borrowed to cover the cost of farming inputs and labor to improve the productivity of her farm.

LICSIP allows cocoa farmers in Liberia to invest through micro credits.

The revolving fund was launched in November 2021 with a call on farmers to take advantage of the opportunity. At the ceremony, European Union Ambassador, Laurent Delahousse, said the Union favours giving loans to farmers instead of grants so they can make the right investment with it knowing that they would pay back. 

LICSIP, which has supported more than 5,000 farmers, has helped revitalize the cocoa sector in the country by creating a vibrant and profitable cocoa economy driven by farmers, farmers’ groups and other private sector actors. The programme has promoted farmers’ access to production support services that have led to farm intensification with the rehabilitation of aged farms and the planting of new ones. It has also created robust infrastructures such as the Centers for Cocoa Development, (CCDs) that serve as a one-stop-shop where cocoa farmers can access inputs and farm management services.