ACA Faciliates US$2 Million in Financing for 3 Nigerian Processors in Partnership with Ecobank and NEXIM

A breakthrough in access to finance was announced on March 1st by the ACA, the USAID West Africa Trade Hub, and African Investors Management Services Ltd (AIMS). A Memorandum of Understanding with the Nigerian Export Import Bank (NEXIM) and Ecobank will facilitate access to US$2 million in financing for three Nigerian processing firms, which could lead to dramatic increases in processing capacity and create hundreds of jobs in the Nigerian cashew sector.

The three processors (ACET, Abod Success, and KD Foods) are members of the Nigerian Cashew Cluster Finance Scheme (NCCFS), a group of processors who operate jointly in specific areas of shared interest, including financing requirements, transaction finance, and raw materials sourcing. Following a successful partnership with NEXIM in 2011 that brought more than $600,000 of financing to the processors, this MOU will mark the introduction of Ecobank’s participation in the financing scheme. 

The addition of a commercial bank in the partnership is essential. Ecobank will complement NEXIM’s funding by efficiently facilitating transactions including collections, bridging finance facilities, and fund transfers. This will improve the ability of the processors to meet their buyers’ quality, quantity and delivery specifications in a timely manner.

ACA Business Advisor Sunil Dahiya discusses raw nut procurement at one Cashew Cluster Financing Scheme processing facilities

As part of the agreement, ACA will act as Technical Partner, providing technical assistance and business advisory services to the cashew processors. ACA experts train staff in financial management and operational best practices, ensuring the funds received through the financing scheme are used as effectively as possible.

By 2016, the Financing Scheme hopes to enable a 6,000MT increase in processing capacity, representing nearly 1,000 new jobs and $5 million in additional income in the local economy via the multiplier effect. As a result of the program, around 8,000 farmers have already seen improved livelihoods through increased local procurement of raw nuts.