Microfinance: a catalyst for poverty alleviation and agriculture development in Cameroon.

Determination. Adaptability. Patience. Love. These are the key virtues you need when you embark on a journey through coffee and cocoa plantations in Cameroon, ready for an epic and folkloric adventure.

Folks, next time that you enjoy your favourite chocolate bar or sip your matinal double expresso, I hope you’ll remember the stories that follow, the story of Joseph, Ella, Beatrice, Simon and many others who, hopefully, you will decide to support after reading this.

Despite being the 5th biggest cocoa producer in the world, the production in Cameroon hasn't been as good in recent years and farmers in Cameroon are abandoning their plantations, in the quest for a better livelihood. The youngest generation escapes in urban areas, the others try out other, more profitable, activities. But why?

After 5 years of piloting an integrated agriculture loan programme, ACEP Cameroun is scaling up this project for smallholder farmers across the country, with the support of Kiva this year. As part of my fellowship with them, I was scoping the role and the impact that microfinance -and Kiva lenders- could play in poverty alleviation in rural areas, as well as the current barriers facing producers. 

Usury, a never ending vicious circle

Of course, agriculture development is often linked with increased productivity, better land management, farming and post-harvest techniques and access to market. But productivity is not the major problem here, lack of access to capital and usury are. A never ending, vicious circle.

‘Farmers need to buy farming inputs at the beginning of the season to treat and maintain their plantations. Problem is, they’ve never had access to financial services and never had enough money left at the end of the year to have savings’, explains Saturnin, Head of one of the cocoa cooperatives we visited. ‘And so, the deal offered to them by buyers’ intermediaries and other unscrupulous individuals is simple’, he continues: ‘XAF 10,000 -$16- against 1 bag of coffee or cocoa -50-80kg a bag. Except that a bag of coffee or cocoa is usually sold at XAF 45,000/ 50,0000 ($73-$80) on the market.With this system, farmers have to repay 4 to 5 times what they have borrowed at the start of the year, without counting the other usurious loans that they have to take mid-way through the season to pay for their kids ‘school, medical and living expenses. By the time the season ends and the extortionate loans repaid, farmers have very little left to survive on, let alone anything to improve their living conditions. That is one of the many practices used to exploit farmers’ vulnerability and rural isolation. We created a cooperative to get stronger together but we still don’t have access to financial services.’
Saturnin, leader of a Cocoa Cooperative with 2000 members. 'We won't have to knock on the door of usurers or be at the mercy of buyers' intermediaries anymore'

ACEP Cameroun: Development of an integrated and collective agriculture loan programme
Of course, microfinance alone is not enough. This is why the programme designed by ACEP is so innovative. Led by Frederic Tuekam, cocoa producer himself and agriculture engineer, the programme is based on collective action and tailored financial services. Collaborating with partners upstream and downstream of the value chain, producers have access to a wide range of industry and financial services, from certified farming input supplies and training, through to loans with gradual disbursements and extended grace periods, and school allowance for their kids.

Feedback from farmers is crystal clear. It works for them. Pretty well.
We visited hundreds of farmers, in many villages often located hours away ‘in the bush’. One by one, village after village, smallholder farmers share their appreciation and feedback. It is clear that ACEP’s initiative has been paying off.
‘I am proud’.
‘We are so thankful’.
‘I saved my plantations’.
‘I paid for my son’s medical expenses’.

With the extra profit generated last year thanks to ACEP, some managed to send kids to school, others put a tin roof on their home or managed to cement the floor of their homes or pay for medical fees upfront.

Joseph, coffee farmer. 'I'm proud', he exclaims with a big smile, 'I bought another 3000 coffee trees with my first loan and some palm trees to diversify my crops. This year, I'll buy better equipment to treat and maintain my field'
Ella, cocoa Farmer. He has inherited his plantations from his father and grand-father before that, like many others. He needs better post-harvest equipment such as dryers for his cocoa seeds, to improve the quality.

I remember well one of these visits. Upon our arrival, after 3 hours’ drive on dusty bush roads, 200 farmers gathered around the chefferie, a wooden hut at the heart of the village where important meetings are held. I spent only one day with them, but our team stayed for 4 days straight to review and finalise the 500 micro-credit requests received from the members of this cooperative. You could have sensed the excitement and impatience in the air. Some of them were here to renew their loan after a successful first year, others were impatient to take their first one, encouraged by the success of their neighbours. 

'I am usually shy and don't speak much', an ederly says. 'But today' he continues, 'I can't express enough my gratitude, thank you for helping us'. He was speaking wih hope in his eyes and a big smile. He was truly sincere. I was moved.

La chefferie, a wooden hut at the heart of the village

Microfinance, a catalyst for long lasting change

Were there any other solutions to access capital in these areas before ACEP Cameroon and Kiva? NO, only usury.

And so, to the question: ‘is microfinance a game changer here?’ YES, totally.

It is the catalyst to unlock change. We can make an impact to their lives immediately and free the farmers from the hands of usurers by allowing them to access critical capital at a fair interest rate. It is one of the most immediate impacts we can measure. 

Farmers win. Usurers lose.

Indeed, some individuals with local vested interest are not accepting ACEP’s loan officers with good grace. Daily threats are hanging above the staff's head like a sword of Damocles. ‘They are trying everything to deny us access to these villages. Some destoyed bridges, others try to intimidate the farmers and threaten us. We had to go to the police station more than once. But never mind, we are here to stay and things are starting to change. Farmers are staring to trust us. They can see we are here to help them and they get more determined to change than ever before’ says Mofet, Head of one of ACEP’s rural agencies.
A well deserved meal at the end of a long day with ACEP's teams. As a tradition, farmers offer dinner with bush meat* to say thank you. They know we travelled from afar. Note: * bush meat: any animal from monkeys to snakes or rats. Today it's antelope, yesterday it was rat. I kindly declined the latter

Signature of contract...fingerprinting rather.

Today, current and future Kiva lenders can make a huge impact. I’m so happy that today, just before the end of my fellowship with ACEP Cameroun, we have just published their first agriculture loan profile on Kiva, hoping that our community will support them and help these farmers break free from the vicious cycle of usury in which they live.

For the love of chocolate and expresso, $25 is all you need to start investing in farmers like Beatrice, Pierre, Joseph, Benjamin and many others! So little can make such a huge difference! 
Have a look at ACEP Cameroun and their integrated agricuture loan programme here, and let's act together: https://www.kiva.org/lend?partner=217&status=fundRaising 

About the author

Marie Le Page

A French citizen residing in London, Marie started her career at the Financial Times (FT), working with financial institutions across EMEA for 5 years. Passionate about sustainable development, she quickly learned how financial innovation can support economic empowerment and build local capacity in developing countries. She then moved to the FT’s thought leadership team to engage opinion and industry leaders to discuss and share learnings on themes ranging from sustainable finance to transformational business and social innovation. She pursued her career at a climate change and international development firm to develop their private sector engagement in 2014, while completing an Impact Investing course at the University of Oxford Saïd Business School to deepen her understanding on innovative financial mechanisms in an international development context. More recently, she took over the direction of a small NGO to restructure its operations and develop sustainable development programs in Asia and Africa. With her multi-faceted experience in both the private and nonprofit sectors, Marie now wants to gain experience on the ground in a role that combines development, entrepreneurship and financial inclusion. Kiva is an exciting and thrilling opportunity to work directly with agents of change and see first-hand how microfinance can change lives.