Access To Finance Members of Faranaya pose for a picture outside the processing facility. Credit: Root Capital
Sorghum, a high-fiber grain native to northeast Africa, is a key source of food and income in Ghana. Smallholder farmers dominate sorghum production across northern Ghana, where it is not only a staple food, but increasingly used by the beer industry as a substitute for imported barley.
Located in the Garu District of Ghana’s Upper East Region, Faranaya Agribusiness Centre Ltd. was founded in 2012. Faranaya sells its sorghum to one buyer: Guinness Ghana Breweries Ltd., the country’s leading beverage company.
The Challenge
In the early stages of its efforts to source sorghum locally, Guinness Ghana turned to Faranaya, an organization made up of just over 350 smallholder farmers at the time. Faranaya, with its deep connections to local farmers, seemed like a natural partner to help meet the growing demand for sorghum in beer production.
Bennet Ansong, Root Capital’s Portfolio Manager in West Africa, explains, “Given the farmer base of Faranya, the brewery approached them to see whether or not they would be able to supply them with the needed sorghum.” At the time, the beer company was launching a pilot project, seeking to source about 15,000 metric tons of sorghum locally.
However, Faranaya realized that it wasn’t in a position to meet this demand. It was a small organization, and many of the farmers they worked with lacked the resources and technical support to rapidly scale.
Our Collaboration
Eighty percent of Faranaya’s farmers are women. Credit: Root Capital
In 2013, Root Capital undertook a thorough analysis of Faranaya. Bennet elaborates, “It had a small farmer base, and as a company, they had limited assets to offer as collateral. But we decided to take a risk because we believed in the potential of their model and the impact it could have on local farmers.”
That same year, Root Capital provided Faranaya with their first loan, a transformative $250,000 investment. This enabled the company to supply Guinness Ghana with 2,000 metric tons of sorghum—a 316% increase from the 480 metric tons supplied the previous year when it had no working capital support.
Over the next five years, Root Capital extended five additional loans to Faranaya and provided multiple advisory services related to financial management. The business has also participated in Root Capital pilot projects such as receiving local weather updates via text message.
The Impact
By 2023, Faranaya had increased its sorghum supply to 15,000 metric tons, thanks in large part to Root Capital’s ongoing financial support. Today, the organization serves over 5,000 farmers, the majority (80%) of whom are women. That’s a remarkable achievement in a region where women often face significant barriers to accessing land and resources.
Faranaya has also taken steps to improve financial literacy and access for its farmers. One key program has been the establishment of village savings and loan groups, which allow farmers to save collectively, access small loans, and improve their financial stability. Smallholder farmers often do not have access to formal banking services, so these groups are essential for building a financial cushion.
Another key focus has been climate resilience. Faranaya has been promoting climate adaptation practices, such as agroforestry. “In the 2023 season alone, they helped farmers plant close to 1,500 shea nut trees,” Bennet says. Shea nut trees contribute to climate adaptation by providing resilient, drought-tolerant vegetation that supports soil health and mitigates desertification. They are also cash crops, producing nuts used in cosmetic and chocolate industries and creating an additional source of income for farmers during the off-season.
Through its partnership with Root Capital, Faranaya has become a model for sustainable agricultural development in the region. The organization has not only improved local sorghum production but has also empowered thousands of farmers, particularly women, to build better, more resilient lives. With continued support, Faranaya is poised to expand further, deepening its impact and providing even more opportunities for growth and prosperity in the Garu region.
Read more about Faranaya in our Impact Study: Evaluating How Root Capital’s Client Businesses Impact Smallholder Livelihoods: Sorghum in Ghana.