Cultivating Impact: How a $330 Loan Helped a Burkina Faso-Based Entrepreneur’s Peanut Business Thrive

For two decades, 45-year-old mother of four Lamoussa Dabilougou has earned her livelihood by processing peanuts to make paste and “koura-koura” (crispy peanut biscuits that are popular throughout Burkina Faso) to sell at the local market. Faced with economic hardship — brought on by food insecurity and inflation, compounded by ongoing conflict in the region — Dabilougou joined forces with several other women entrepreneurs to support each other’s livelihoods and communities. In 2022, they established the Kiswensida Savings Group.

Through the group’s collective efforts, they were able to create opportunities for growth and stability, benefitting not only their businesses but also their families and communities. This cooperative spirit laid the groundwork for their partnership with the USAID CATALYZE Finance for Resilience (F4R) Activity, a $250 million contract designed to mobilize $2 billion in private capital toward underserved sectors, geographies, and populations.

Since 2020, the CATALYZE F4R Activity has used a blended finance approach to expand access to credit for agricultural sector entrepreneurs and micro, small, and medium-sized enterprises (MSMEs) who have been disproportionately impacted by conflict — particularly women and youth — across Burkina Faso and Niger. Through partnership agreements with financial institutions (commercial banks and microfinance institutions) and financial facilitators (financial professionals who connect MSMEs with financial institutions to secure financing), F4R helps MSMEs access the credit needed to grow and sustain their businesses. This ultimately builds resilience to financial setbacks brought on by conflict and strengthens local food systems, contributing to a more reliable food supply for communities.

In April 2023, USAID CATALYZE F4R partnered with a Burkina-based microfinance institution, Réseau des Caisses Populaires du Burkina (RCPB), to implement a capital injection intervention into community savings groups in Burkina Faso. These groups consist of MSMEs who have established a semi-formal local communal borrowing and lending network to improve their collective ability to save and grow their businesses. Ultimately, CATALYZE and RCPB injected a total of $29,683 into 17 community savings groups, with each group receiving between $560 to $3,276.

The Kiswenda Savings Group, which received a total of $2,600 through the capital injection intervention, used the funding to grant their members additional loans for a four-month period at a reduced four percent interest rate; a one-month loan period extension; and a one percent decrease in the interest rate from loans granted prior to the capital injection.

Photo credit: USAID CATALYZE Finance for Resilience (F4R)

Prior to the CATALYZE F4R capital injection intervention, Lamoussa Dabilougou could only access an average loan amount of $125. Dabilougou received a loan of approximately $330 through the intervention, which enabled her to purchase and store approximately 1.2 tons of peanuts. The storage protected her peanut paste and “koura-koura” production from the impact of fluctuating raw material prices brought on by ongoing domestic and international conflict.

“[The loan] enable[ed] me to improve my profits,” Dabilougou said. “I can make XOF 17,500 for each 100 kg bag of peanuts I process. Before the injection, I struggled to earn XOF 10,000.”

In the three months since receiving her loan, Dabilougou has processed one ton of peanuts, generating an estimated total profit of $3,154. Moreover, she has already repaid 25 percent of her loan before the deadline and aims to fully repay this first loan in order to secure a larger loan for further investment into her business. She invests the additional profits into her small ruminant breeding business and saves it to build capital for her children’s future income-generating activities.

The capital injection into the Kiswensida Savings Group enabled Dabilougou’s business to not only survive but thrive.

AUTHORS
USAID Catalyze
SOURCE
Originally published on agrilinks.org
PHOTOS
© USAID CATALYZE Finance for Resilience (F4R)