Agricultural Finance for Smallholder Farmers - Rethinking Traditional Microfinance Risk and Cost Management Approaches

Daniela Rottger, Philippe Guichandut

ISBN 10: 3838207858 / ISBN 13: 9783838207858

Published by ibidem-Verlag, Jessica Haunschild u Christian Schon, DE, 2021

About this Item

Even though traditional microfinance has successfully paved the way for offering financial services to low-income populations without traditional collateral, many microfinance institutions (MFIs) are still reluctant to move into rural areas and agricultural finance, due to the perceived high risks and costs. Daniela Rottger's research demonstrates how MFIs can mitigate risks and costs of lending to smallholder farmers by using a combination of proven traditional microfinance mechanisms while adapting specific loan features and lending mechanisms to the particularities of smallholder agriculture. She systematically compares traditional microfinance risk management mechanisms with agricultural microfinance approaches and identifies successful strategies. Eight MFIs providing agricultural finance to smallholder farmers in four countries in East and West Africa (Uganda, Kenya, Benin, Cameroon) were interviewed and their loan features and agricultural lending mechanism were analyzed. The study shows that MFIs can successfully serve smallholder farmers in rural areas.A strong commitment combined with sound in-house knowledge of agricultural value chains and the flexibility to adapt loan terms and lending procedures to the particularities of agriculture are needed to successfully develop and sustain agricultural microfinance.

Seller Inventory # LU-9783838207858

Bibliographic Details

• Title: Agricultural Finance for Smallholder Farmers - Rethinking Traditional Microfinance Risk and Cost Management Approaches
• Publisher: ibidem-Verlag, Jessica Haunschild u Christian Schon, DE
• Publication Date: 2021
• Language: English
• ISBN 10: 3838207858
• ISBN 13: 9783838207858
• Binding: Paperback
• Condition: New
• Weight: 437 grams

About this title

Synopsis

Even though traditional microfinance has successfully paved the way for offering financial services to low-income populations without traditional collateral, many microfinance institutions (MFIs) are still reluctant to move into rural areas and agricultural finance, due to the perceived high risks and costs. Daniela Röttger's research demonstrates how MFIs can mitigate risks and costs of lending to smallholder farmers by using a combination of proven traditional microfinance mechanisms while adapting specific loan features and lending mechanisms to the particularities of smallholder agriculture. She systematically compares traditional microfinance risk management mechanisms with agricultural microfinance approaches and identifies successful strategies. Eight MFIs providing agricultural finance to smallholder farmers in four countries in East and West Africa (Uganda, Kenya, Benin, Cameroon) were interviewed and their loan features and agricultural lending mechanism were analyzed. The study shows that MFIs can successfully serve smallholder farmers in rural areas. A strong commitment combined with sound in-house knowledge of agricultural value chains and the flexibility to adapt loan terms and lending procedures to the particularities of agriculture are needed to successfully develop and sustain agricultural microfinance.

About the Author

Daniela Röttger won the 2013 University Meets Microfinance award. She works as an independent consultant for microfinance and monitoring & evaluation, including the Competitive African Cotton Initiative.