ICCO Terrafina Microfinance

ICCO Terrafina Microfinance boosts smallholder farmers to improve their business and income through microfinance.

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ICCO Terrafina Microfinance works in close collaboration with  Rabobank FoundationOikocredit en Fair & Sustainable Advisory Services. Our support to microfinance institutions often consists of a tailor-made package of different components. The objective is to boost agriculture through microfinance to improve smallholder farmers´ livelihoods and increase food security. 

ICCO Terrafina Microfinance is mainly involved in development of agricultural microfinance initiatives, such as farmer loans, warehouse receipt lending, and linking microfinance with value chains. At the same time the program works on professionalization of rural microfinance institutions to reinforce the expansion of sustainable agricultural microfinance. 

Through the close collaboration with different parties, ICCO Terrafina Microfinance can microfinance institutions with a combination of technical and financial support to strengthen their organization and to develop financial services in line with the needs of specific groups of farmers and people living in rural areas.


You can contact ICCO Terrafina Microfinance through our regional offices in Mali for West Africa and Rwanda for East Africa.

    What we do

    ICCO Terrafina Microfinance boosts agriculture through microfinance to improve smallholder farmers´ livelihoods and increase food security.

    For this purpose we partner with local microfinance institutions (MFIs). We support them with financial product development for agricultural purposes and increasing rural outreach. Besides we support microfinance institutions with capacity building to strengthen their organization and increase their social performance to reinforce sustainable agricultural microfinance.

    ICCO Terrafina Microfinance focusses on:

    • Value chain financing
    • Warehouse receipt lending
    • Risk assessment in agricultural lending
    • Group solidarity lending
    • Social performance management


    Value chain financing

    Participation in a value chain enables smallholder farmers to access food markets and increase their income. In these value chains, the access to adequate and timely financial services for all actors has proven to be key for lasting viability of the value chain. MFI partners are increasingly being asked to supply financial services in value chains. Therefore ICCO Terrafina Microfinance has embarked on supporting its partners to develop financial products for value chains. It is our experience that impact on additional income for farmers can be accelerated by combining financial services with market access and improved sales. Therefore we work together with ICCO colleagues and other organisations specialized in value chain development. Through the value chain the market for farmers is secured and at the same time the combination of value chain development and finance gives procesors increasing access to raw material needed.

    Warehouse receipt lending

    Through the warehouse receipt system, also referred to as warrantage, smallholder farmers can access loans while using stored production surplus as collateral. The farmers store the surplus in a warehouse that is owned by a farmers’ cooperative or producer organization. With the produce securely locked in the warehouse, the farmer can get a loan from the MFI to diversify income activities, buy input for the next farming season or cover other expenses within the household. The warehouse receipt system ensures that the risk for the MFI is limited, while farmers can benefit from a loan and still hang on to their crops to sell them at a later stage, or use them for their own consumption.

    Risk assessment in agricultural lending

    We noticed an increasing demand for agricultural loans, particularly loans to individual farmers. This demand is not met by the banking sector or by current MFI packages, because these types of loans are considered high risk and staff is not sufficiently equipped to deal with specific agricultural products. Proper technical appraisal and risk assessment of agri-finance is a challenge for most MFIs. ICCO Terrafina Microfinance tries to overcome these challenges by training the MFIs and its loan officers and introducing score cards to assess agri-risks. We developed also the Cooperative Assessment Matrix, which can be used in the analysis of loans for producer cooperatives.

    Group solidarity lending

    In group-solidarity based lending, the members of a small, self-selected group (5-10 persons) co-guarantee the repayment of each other’s loan as a substitute for collateral. Financial services based on this method have become a dominant product in the microfinance sector. However, certain regions in Africa, especially French-speaking countries, have remained untouched by this global innovation. ICCO Terrafina Microfinance took up the challenge to introduce group-solidarity lending in these countries to increase access of the rural poor, especially women, to financial services.

    Social performance management

    ICCO Terrafina Microfinance supports MFIs that have a two-fold objective: achieving sound financial performance and reaching their social goals. The latter include increasing their outreach to greater numbers of poor people in rural areas, or reducing poverty and decreasing the vulnerability of their clients by contributing to increased income of their businesses. The recent history of microfinance clearly shows that good financial performance is not a guarantee for the achievement of these social goals. The MFIs’ social performance has to be deliberately managed, just like its financial performance. We encourage MFIs in different ways to take social responsibility towards both clients and employees and stimulate them to organize their activities in such a way that their social and financial performances are in balance.

    How we do it

    ICCO Terrafina Microfinance’s support often consists of a tailor-made package of different components. We design training programs around certain topics for groups of MFIs with the same needs and level of knowledge.

    More specific technical assistance to individual MFIs is provided by our locally based advisors and consultants. We work with a broad network of local and international experts on various aspects of microfinance.

    Besides the technical assistance, MFI partners can get access to a loan, possibly with a guarantee. Through the close collaboration with different parties, like Rabobank Foundation, Oikocredit and ICCO Investments, we can support MFIs with this combination of technical assistance and brokerage for loans and guarantees.

    For some activities (matching) grants are given to the MFIs for specific activities that require temporary start-up support. This grant option completes the package of technical and financial support that ICCO Terrafina Microfinance can offer to MFIs.

    With our support we aim to strengthen MFIs in becoming self-sustaining organizations well capable of offering sustainable financial services in line with the needs of their target groups. In our financial product development trajectories for example we strive for self-sustainability of the new product after the pilot stage and the MFIs being able to replicate the product within their organizations.

    By working together with ICCO colleagues specialized in agriculture and food security, we offer a unique combination of expertise, according to the needs of the situation. We closely collaborate with and participate in national and international networks and forums for sharing of knowledge, lessons learned, and best practices. This way we keep ourselves up to date about developments within the sector and at the same time we make knowledge and experiences from our side available for the sector. 

    Where we work

    ICCO Terrafina Microfinance focus is on rural areas in Africa. Currently we have projects in Mali, Senegal, Burkina Faso, Ethiopia, Rwanda and Burundi, but in the future we might also become active in other countries in Africa.

    We support microfinance institutions that are either based in rural areas or have a strong intention to increase their focus on rural areas and agricultural activities.

    We are locally represented in Africa, and have an international technical support team in Holland. This combination of local embeddedness and international networking is a distinct feature of our formula.


    ICCO Terrafina Microfinance
    P.O. Box 1578
    3500 BN Utrecht, The Netherlands

    T: +31 (0)30 234 8200

    Visitors address:
    Hamburgerstraat 28a
    3512 NS Utrecht, The Netherlands

    You can contact our regional representatives through our offices in Mali for West Africa and Rwanda for Eastern Africa.

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