Cooperatives: A Key Driver for MFIs to Improve the Livelihoods of Cocoa-Producing Communities

Authors: Albert Dah & Armel Katinan Ouattara

In the second in a new blog series to celebrate the International Year of Cooperatives, Armel Ouattara and Albert Dah from Advans Côte d'Ivoire explain the roots of Advans CI’s work with cooperatives, the rationale and consequences of winning the European Microfinance Award 2018, and how Advans CI has diversified its work with cooperatives via many new products and initiatives that have been introduced in the seven years since. 

In 2018, Advans Côte d’Ivoire won the European Microfinance Award (EMA2018) on “Financial Inclusion through Technology” for its mobile money solutions to serve cocoa farmers and promote their children's school enrolment. Seven years later, new challenges have arisen, but Advans has also innovated and expanded its scope of action to meet the needs of all individuals within the cooperative ecosystem.

Addressing Cooperatives’ Needs From The Start

Advans Côte d'Ivoire is an Ivorian MFI offering loans, savings, and payment services. Since our beginnings in 2012, we have worked with cocoa cooperatives, which play a key role in rural Côte d’Ivoire.

An agricultural cooperative enables producers to pool resources, access markets, and manage price risks. In areas with limited access to capital and strong social ties, cooperatives are significant players in the financial inclusion sector. For years, in the absence of committed financial institutions, cooperatives have worked to ensure the resilience of their producers by granting social credits, safeguarding producers' cash in their vaults, and distributing inputs and motorcycles. Early on, Advans recognised cooperatives as the entry point for producers' financial services, becoming the first Ivorian MFI to trust cooperatives and design products specifically for them.

Advans Côte d’Ivoire began by offering in-kind loans to cocoa farmers working in cooperatives under a solidarity-based model. We provide funding for purchasing fungicides, insecticides, fertilizers, treatment equipment (such as atomizers and sprayers), and protective gear. We pay the input suppliers directly on behalf of the farmers, and through these grouped orders, the farmers benefit from reduced prices. The farmers are then required to repay the loan to Advans through their cooperative. In 2024, nearly 50,000 cocoa producers took out this loan.

The European Microfinance Award 2018

Following its strategy to enhance the financial inclusion of cooperative workers, Advans continued to develop new products. In 2018, it won the European Microfinance Award for its understanding of the needs of Ivorian cocoa farmers and its tailored technological solutions addressing the challenges of traceability and security when cooperatives make payments to cocoa farmers.

The digital wallet service developed by Advans is particularly well-suited for cooperative workers living far from banks and facing difficulties accessing formal financial services. This digital savings and payment solution connects each producer’s Advans account to a Mobile Money account and facilitates wallet-to-bank and bank-to-wallet transfer services. Therefore, it has allowed cooperatives to make digital payments to farmers for their harvests and enabled producers to easily save and withdraw money from their accounts, reducing the risks associated with handling cash. Currently, over 130,000 producers have access to these digital transaction services through their savings accounts.

As the irregular cash flow of farmers led to low school enrolment rates, we were also recognised for offering small digital school loans based on an algorithm reflecting the farmers’ cash flow, enabling them to finance their children's school fees on time. Indeed, the back-to-school season coincides with the lean season for cocoa farmers. As they often have limited funds during this period, many producers wait for the first cocoa deliveries in October or November to enrol their children in school. Since 2018, the number of cooperatives taking digital school loans has doubled: nearly 20,000 loans were granted to cocoa producers, totalling 2.7 billion FCFA (4.71 million USD), facilitating an uninterrupted education for even more children.

We also provide life insurance for cooperative workers and their families. In partnership with an insurance company, the premium is directly debited from the producer's Advans account, and the reimbursement process is adapted to the challenges of officially reporting claims and deaths in remote rural areas. Advans also offers an education insurance policy that covers their children's school fees in the event of the producer’s death to ensure the continuity of their education.

Through these initiatives, Advans CI has significantly contributed to the financial resilience of farmers by transitioning from informal cooperative practices to formal digital financial services.

New Projects for Cooperatives

Following the EMA2018 success, Advans CI continues to co-design, with over 500 partner cooperatives, a tailored offer that meets the needs of cocoa farmers.

Advans provides training and education to cocoa farmers to empower them in household budget management, savings, loans, risk management, insurance, investment, financial institutions, and digital financial services for both personal and agricultural development. For example, in 2024, more than 10,000 producers were trained on the functioning, management, and repayment of input credit. A sensitisation program on climate change and its agricultural consequences has also been carried out for producers.

To increase the traceability, security, and efficiency of payments between the cooperative and the cocoa farmers, Advans has developed a digital payment system for certification premiums. The cooperative sends Advans the bonus amount to be paid for each producer, and Advans is responsible for transferring the money from the cooperative's account to each producer's account. This boosts producers' savings and assists them in spreading their income throughout the year.

In 2024, to further address the needs of stakeholders in the cocoa sector, Advans introduced a loan to help farmers purchase a motorcycle or tricycle for transporting cocoa pods. This product aims to strengthen smallholder farmers’ capacity for harvest and delivery, enabling them to develop a transport activity that generates additional income while reducing costs paid by the cooperatives, which often cover expenses for motorcycles and tricycles. The repayment schedule is tailored to the specifics of the cocoa production season, as farmers have less cash to repay during the two lean periods when their income diminishes. At the cooperative level, a truck loan has also been established to ensure the transport and delivery of cocoa by cooperatives.

In addition to these services, Advans has established a network of third-party agents known as “Advans Points” to improve the accessibility of financial services in remote communities. Advans Points are operated by partners located in cooperatives or small businesses, facilitating access to Advans services for customers far from branches. At an Advans Point, customers can make deposits and withdrawals directly from an Advans account and perform simple transactions (such as opening or reactivating an account, changing a telephone number, etc.). Among the 60 points opened in the country, one-third are currently located in cooperatives.

By understanding the challenges faced by cocoa cooperatives, Advans designs more tailored and suitable credit solutions to address the producers’ needs while considering the broader cooperative community.

How Advans’ Products Have Diversified to Target the Entire Community 

Enhancing the living standards of cocoa-producing households also requires supporting crop diversification and increasing women's incomes. To achieve this goal, Advans works with Village Savings and Loan Associations (VSLAs), which share many structural similarities with cooperatives and serve as a strategic mechanism for economic empowerment. The VSLA model establishes self-managed and self-capitalised savings groups that use members' savings to lend to each other. VSLAs typically consist of 15 to 30 members, with an average of 78% being women, living in urban or rural areas, including very remote locations. This model has expanded to 77 countries, involving over 20 million active participants worldwide.

To secure their savings and enable larger loans, Advans CI has developed products and services dedicated to VSLA members, particularly women in cocoa-growing communities. VSLAs can open savings accounts to protect members’ savings. Additionally, VLSA members can open personal accounts and utilize Mobile Money solutions to deposit and withdraw funds, helping to bridge the gender gap in access to financial services.

Advans also provides life insurance and loans to VLSAs. The members contribute to the insurance through the VLSA’s Advans account, and payment is received in cases of hospitalisation or death. As for the loan, it is granted to the village association as a legal entity, which then uses the funds to finance individual members’ income-generating activities or support a collective activity, such as farming or retail. Over the past three years, the number of VLSAs banked by Advans has doubled, and in 2024, more than 200 loans were issued to VLSAs.

In 2024, a new financial product was developed to supply electrical devices to VLSA women to enhance their income-generating activities, including refrigerators, fans, and blenders. Advans pays suppliers directly on behalf of these women, who are then required to repay the loan to Advans through their VLSA.

Advans continues to innovate and develop products aimed at supporting the entire ecosystem surrounding cooperatives: cocoa producers through mobile money services, motorcycle and input credit; their wives through credit to VSLAs; and their children through education credit. As new challenges arise due to climate change, Advans CI is also developing new products to assist cooperatives in tackling these issues. We look forward to sharing more on this in the future, and we’re pleased to take part in e-MFP’s programme supporting the UN Year of Cooperatives.

Photos: Advans Côte d’Ivoire.

About the Authors:

Albert Dah is an agricultural finance expert with over 10 years of experience in developing innovative financial solutions for the agricultural sector at Advans Côte d’Ivoire. After a Master’s degree and a Certificate of Expertise in Agricultural Finance, he has dedicated his career to supporting farmers, cooperatives, and rural organizations by facilitating small producers' access to financial services tailored to their needs. As Director of Agricultural Finance at ADVANS Côte d’Ivoire, Albert Dah leads the institution’s agricultural finance strategy, aiming to promote financial inclusion for small-scale producers, cooperatives, and stakeholders in agricultural value chains.

Armel Katinan Ouattara is the Business Development Manager at Advans Côte d’Ivoire. He has over 13 years of experience in microfinance, financial inclusion, and agricultural finance. His expertise includes project management, strategic planning, financial product design, and innovation in distribution channel development, particularly for digital and agricultural financial inclusion. Armel holds a Master of Science in Corporate Finance from the Lyon School of Management and a Certificate of Expertise in Agricultural Finance from the Frankfurt School of Finance & Management.