Bridging the Financial Gap: Transforming Smallholder Farming Through Access to Finance 

In Nigeria, Daniel Ushie, a 61-year-old oil palm farmer, has experienced firsthand the challenges of providing for his family. With support from the Village Savings and Loans Association programme, he has successfully invested in small cassava and palm oil processing mills.

Daniel Ushie received Village Savings and Loans Association financing to invest in oil palm and cassava processing mills.

Despite his dedication to farming, Daniel Ushie’s income was inconsistent. With seven children to care for, the pressure to support their education and meet their needs weighed heavily on him. Limited by the seasonal income from his farm, Daniel often found himself struggling to make ends meet, especially during the off-harvest seasons.

“Even though I had oil palm, cassava and yam farms, my income was still limited. Sometimes I could not boast of 2,000 nairas (2 euros) in my possession. I watched with anguish as three of my children had to drop out of school to help support the family,” he says. 

VSLA to the Rescue

Amid this difficulty, Daniel was introduced to the Village Savings and Loans Association (VSLA), a community-based social safety net intervention, initiated by Solidaridad as part of the National Initiatives for Sustainable and Climate-Smart Oil Palm Smallholders (NI-SCOPS) to create access to finance for smallholder farmers.

Daniel stands next to his artisanal palm oil mill.

Recognizing the potential of the initiative, Daniel seized the opportunity and became actively involved in the VSLA.

In 2021, Daniel and other smallholder farmers in the states of Akwa Ibom, Cross River, Enugu, and Kogi received training in financial literacy, and learned about the operational practices of the Village Savings and Loans Association (VSLA). 

“With the training and support from Solidaridad, I learned how to manage my finances effectively and make strategic investments,” Daniel says.

Equipped with newfound knowledge and determination, Daniel accessed a loan of 150,000 Nigerian nairas (105 euros) from his VSLA group in 2022. With this capital injection, he invested in small cassava and palm oil processing mills.

Daniel Ushie with one of his processing mills.

When I received the loan from the VSLA group, it was a turning point in my life. Now, with the cassava and palm oil processing mills, I have a steady income that sustains my family throughout the year.

Daniel Ushie

Today, Daniel earns an average of 5,000 Nigerian nairas daily from his mills, a stark contrast to the uncertainty he faced before he became the owner of his artisanal processing mills.

With his newfound financial stability, Daniel’s children have returned to school, reigniting their dreams of a brighter future. As he reflects on his journey, Daniel expresses gratitude for the support of Solidaridad. 

Daniel improved his income by investing in a cassava mill.

“Financial inclusion is key to the long-term prosperity of smallholder farmers. Through the VSLA initiative, we aim to provide farmers with the resources they need to invest in sustainable cultivation practices and expand their agricultural enterprises,” says Kenechukwu Onukwube, Programme Manager at Solidaridad in Nigeria. 

“By doing so, we are contributing to the growth of sustainable oil palm landscapes and ensuring the economic resilience of smallholder farmers in Nigeria.”

So far, 360 VSLAs have been established In Akwa Ibom, Cross River, Enugu and Kogi, the four states that benefited from the first phase of the NI-SCOPS in Nigeria. Additionally, sixty community facilitators from different communities were trained to monitor the VSLA activities to ensure their sustainability.

NI-SCOPS: A global effort to improve palm oil production

Taking place in landscapes across Nigeria, Ghana, Malaysia and Indonesia, the National Initiatives for Sustainable and Climate Smart Oil Palm Smallholders aims to close the sustainability gap in palm oil production.

Through initiatives like NI-SCOPS, Solidaridad, supported by the Kingdom of the Netherlands and Henkel, has worked to pave the way for responsible agriculture and economic empowerment in Nigeria.

The first phase of the NI-SCOPS programme was implemented from 2019 to 2023.