How this Entrepreneur Was Rejected by Banks When Seeking Funding for YYTZ Agro

When Fahad Awadh started YYTZ Agro in 2014, all he had was a vision to disrupt the cashew export industry in Tanzania. He spent a lot of time researching this business and understanding the market systems, local and global. “I had to know where the best processors were and how I could build a world class processing facility in Tanzania that is efficient and operates at the highest food safety standards, and how I would be able to tap into the export market,” he said.

Being a capital intensive business, it was difficult to get funding in the beginning and the story of how he battled with raising the required funds is a long one. He recalls, “I went to banks and presented my business plan with all the research I had done to them. When I first went to them, I didn’t have a customer yet. I knew that if I was to access this funding, I would need to prove to them that there was a market so I went online and started looking for the importers. I just emailed and called companies, told them what we were doing and stated that we would like to supply them cashews. The idea was just to gain their interest, and to put that interest in writing so that I could prove to the banks that I had reputable customers that they could research on. The first thing the banks would say is that they do not finance new businesses, not regarding that you have collateral. With my collateral, and customers ready, many banks refused to finance the business just because it was new.”

Awadh tried a government development bank, which is supposed to fund agriculture and agro processing projects. “I went to them and began funding discussions with a letter of intent from a customer. But time kept going and I could see that they were not interested in funding. The general response I got was that it wasn’t possible, people have tried and it did not work.  They never asked how I was going to do it. They were not asking the right questions, they were always asking of the negative side, asking what if it fails. I told them (if you are going to fund this, let me know and if you are not going to, let me know too. I am still going to do this project, it will happen and it will work. I just need to know if you are going to support or not so I can move on and find another means of funding)”

Ultimately, they sourced funding to purchase the equipment themselves. Once they had purchased the equipment and set up the facilities in the export processing zone in Zanzibar, close to the port, it got easier because the banks could now see a facility and some equipment for processing.

YYTZ Agro then entered a competition, The Africa Enterprise Challenge Fund, which they won, and that gave them a boost. Not just that the prize of $500,000 USD from the competition was helping them build another facility close to the farmers that put them in the value chain, it also accorded YYTZ some credibility and changed the attitude of the local banks. “It is very ironic and sad that the banks that were not there when all I had was a vision are now calling, wanting to be part of the same business, same idea, same person they had rejected. This a perfect example of a challenge that we have as young entrepreneurs in Africa because this is not exclusive to Tanzania,” Fahad tells

Cashew Farmers in Training

Tanzania is the fourth largest producer of cashew in the world, but 90% of the cashew yield was being exported as raw material. This has reduced because Fahad has built an agro processing company, mainly working with cashew nut. The big idea behind the vision is essentially creating value and working closely with farmers who were being exploited. They are not getting the real monetary value for what they are producing. He stressed, “We have taken an approach where we consider the farmer as important, if not more important than our customers. We treat them like we would treat our customers. We try to assist them and provide them with solutions that would make their jobs easier, help to bring them into the value chain so that they can also participate in that extra value addition, earn more income. The goal is that by working with us for a minimum of 6 years, the farmer’s life should be completely different. We are not doing our jobs if the farmer’s life is not changing as a result of working with us.”

Through trainings in collaboration with other stakeholders like the Naliendele Agriculture Research Institute (NARI), the regional government, and the Cashew Nut Board of Tanzania, which is providing seedlings for farmers that want to grow cashew in other regions. YYTZ Agro has worked to connect a new breed of farmers interested in cashew production to the ones who had been in the business, particularly in the Southern part of Tanzania where cashew is the main crop. They have spent a week with the farmers, learning everything from seeds, planting, building nurseries, grafting, taking care of the cashew tree, how to transfer the plants from the nursery to the field, best soil for growing cashew and pruning. They also learnt of the different cashew diseases, pests and pest control. After the training, the visiting farmers were able to get some know-how, which they took back with them to their region to pass the training to the rest of the farmers there.

They also teach these farmers basic financial literacy, making sure that they have bank accounts, so they transact through the bank and they are able to build up a credit history which will enable them to get small loans to grow their business.

YYTZ Agro intends to expand to other African countries. “I feel that if we can implement this well here, we can also replicate this in other African countries. Even if it is not me doing it, I want other young people to see that it is feasible, it is possible and we need to start creating value in our countries,” says Fahad.

According to him, his greatest asset in the business is the farmers. “Without them, there isn’t anything. It all starts and ends with the farmer. This is why we are focused on building them. Also our understanding the business side and my talented team of energetic young people. I have immense hope for the future not just for my industry. I see a lot of young people that are going to change the continent. Our young people are our best asset. I think our priority should be how to empower these young people and make it easy for them to start ventures, get support and have access to financing.”


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Chiamaka Akuba51 Posts

Chiamaka Akuba is a graduate of Mass Communication of the University of Lagos, Nigeria. She is passionate about emerging markets and entrepreneurship and is actively working with the industry. She loves her conversations challenging and can’t help laughing when you call her ‘Honourable Writer of the Federal Republic'. Chiamaka is a Staff Writer at Outrepreneurs.


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