Finance for Smallholder Farmers: takeaways July expert meetings

Last July, the Netherlands Platform for Inclusive Finance (NpM), together with AgriProFocus and funded by the Food & Business Knowledge Platform (F&BKP), organized three expert meetings in Uganda, Tanzania and Kenya. The aim of these meetings was to share the enormous wealth of knowledge from the research “Finance for Smallholders: Opportunities for risk management by linking financial institutions and producer organizations.”

The research (2015) was done by NpM, AgriProFocus and funded by F&BKP, and investigated successful ways of providing financial services to smallholder farmers as access to finance is often an obstacle to improve and increase their productivity. The research also focused on the question how to reduce the risk of agricultural activities so that financial institutions are prepared to provide loans to farmers. In total 15 successful projects in 4 countries – Uganda, Ethiopia, Rwanda and Mali – addressing 20 different crops, 7 types of producer organizations, 7 financing models and 14 financial institutions that serve over 500,000 farmers were analyzed.

Research findings

One of the major findings from the research is that it is important for smallholders to organize themselves into formal organizations, as this can mitigate a lot of the risks associated with farming. Josien Sluijs, NpM’s Director, also discusses this topic in one of her blogs she wrote during her stay in Africa regarding the expert meetings in July 2016. She mentions that timing couldn’t have been better. During her stay in Tanzania, the national newspaper Daily News published an article with the headline: “Smallholder Farmers Advised to operate under formal group.” which is the core of the results of the 2015 research. The article in the Daily News was based on a research done by the Consultative Group to Assist the Poor (CGAP), an affiliate of the World Bank, an organization NpM works closely with. The survey CGAP conducted, focused on rural households that have multiple activities to provide for their income, where agriculture accounts for the largest portion. These households have a very small production mostly for their own consumption and some for sale on the local market. The research done by NpM, AgriProFocus  and F&BKP focuses on farmers who produce for the market. These two studies provide a good picture of the current situation of small-scale farmers. See also the blog by Josien Sluijs in Vice Versa (in Dutch) “Organisatievorming essentieel voor kleine boeren“.

Main takeaways of the expert meetings

The expert meetings in July 2016 were very well received by the participants from farming and producer organizations, microfinance institutions, central banks, national and international development organizations, insurance companies, governmental institutions and consultant agencies. During the meetings the audience was given the floor to bring forward their concerns and thoughts on Finance for Smallholders. The main takeaways are presented in an article by Josien Sluijs on the Next Billion platform, entitled “10 Developments Shaping Smallholder Finance in Africa“.

Expert meetings in October & November

NpM, AgriProFocus and F&BKP will continue to organize the highly appreciated meetings, sharing the research results and lessons learned with a broad audience, and receiving their extremely valued input. In October and November French expert meetings will take place in Benin, Mali, Burkina Faso and Senegal (the two last meetings are part of the ICCO MasterCard Foundation STARS program, financed by the MasterCard Foundation).

Please download the Summary outcome of expert meetings in Rwanda, Burundi and Ethiopia, Kenya, Uganda, Tanzania, Benin and Mali (published November 2016).