Access to Finance for Smallholder Farmers Contributes to Food Security

Access to Finance for Smallholder Farmers Contributes to Food Security


A blog by Netlyn Bernard, ICCO’s Rwanda Country Manager and Regional Operations Manager for Central, Eastern and Southern Africa.

Smallholders farmers are the backbone of agriculture, a key sector in Africa’s sustainable development. According to the Food and Agriculture Organization (FAO), smallholder farmers produce 70% of the world’s food, yet they are struggling to feed themselves and their families. To achieve #ZeroHunger by 2030, empowering smallholder farmers is essential.

One of my most inspiring experiences working for ICCO is to meet farmers, listen to their achievements, challenges and hopes for a better harvest, a higher revenue, a better life.

In Rwanda, in the district of Muhanga (Southern region of Rwanda), I met Thacienne, a strong, elegant and poised smallholder farmer with a shy smile and a sharp wit. She is one of the farmers that ICCO is supporting in the Farm to Market Alliance (FtMA), an  initiative of the World Food Program.

Solidarity groups

FtMA helps smallholder farmers like Thacienne, receive the appropriate information, investment and support from seed to market in order for them to have the capacity to produce and sell marketable surplus for increased incomes.  ICCO in partnership with FtMA supports cooperative farmers’ capacity to save, manage their savings, access loans from financial institutions and link them to market. Once cooperative members agree to the idea of forming solidarity groups (for savings, loans and other joint activities), ICCO launches a joint rigorous process of selecting and training lead farmers on solidarity group formation and management. They will in turn train their fellow farmers and support these newly formed groups.

Recently, Thacienne joined one of the solidarity groups in her cooperative, the very first one for her, the group has 10 people, 6 men and 4 women, they each save up to 4,000 Rwf a month which is close to $5 a month per person. Depending on the amount of savings they can pull together, this program helps them access credit from a rurally-based micro-finance institution, up to 5 times the amount they can jointly save. Their savings guarantees their loan without needing any other physical collateral and all solidarity group members are a repayment guarantee to each other.

Thacienne, a smallholder farmer

Thacienne is married, has 4 children and supports her sister in law. She has been a member of a cooperative for several years. She grows maize and vegetables in two small plots of about 0.5 hectares in size that belong to her husband. She laughed when I asked her why she joined her solidarity group and said “I joined the group so that I can have more money because I have many projects. I want to buy my own plot and also maybe hire people to help me. I want to start a small business. I want to do more for my children.” What her laughter hid is the worry that depending on the harvest per season her and her family can go hungry.

Financing agriculture to fight hunger

Millions of people share her worry, according to the FAO, for the third year in a row, there has been a rise in world hunger. The absolute number of people facing chronic food deprivation, has increased to nearly 821 million in 2017, from around 804 million in 2016.  Here in East Africa. there are 132.2 million people who are food insecure. Many of the reasons for this rise include climate change, small farming plots, soil quality, plant diseases to name a few.

To face these challenges, supporting farmers access finance so they can invest in their farming activities and change from subsistence farming to farming as a business will ensure a better and bigger production, therefore food security and a higher income for the family.

Being part of a solidarity group is one way for Thacienne to access cash. Under the program, she will be able to get an agricultural loan and the money will be used to invest in her farming activities so she can increase her production.

ICCO’s microfinance program (ICCO Terrafina Microfinance) and FtMA support financial institutions to ensure that appropriate financial services are delivered for input and output finance. The two most important approaches under this collaboration include:
a) Guidance to MFIs to link effectively to farmer cooperatives for lending.
b) Promotion of Solidarity Groups in cooperatives for savings mobilization and eventually for group lending.

It’s not just about money

Being part of a group it’s not just about money, it’s also about togetherness. Thacienne shared about the camaraderie and support in her group: “Recently I was sick of malaria and was in bed for several days. The other members of my group weeded my land. They are my friends. That is the best thing about the solidarity group, we do things together and help each other.

I left Thacienne as she hurried back to her plot wrapped in her red scarf.  I left the encounter transformed, admiring her ambition, resilience, and hopes for a better life.  Farmers like her, you and me joining efforts to support them, will make zero hunger by 2030 possible.

Join the call for action for #ZeroHunger

ICCO Cooperation

ICCO is a global development organization. We empower smallholders, agripreneurs and their organizations, and strengthen small and medium enterprises (SMEs) to realize sustainable agricultural systems. We play different roles: developer, implementer, entrepreneur and advocate. Often in public-private partnerships. Our primary focus is on SDG 2 (No Hunger) and 8 (Good jobs and Economic growth).

Farm to Market Alliance (FtMA)

Farm to Market Alliance  was formed to make crop markets work better for farmers by linking them to local and regional markets. Global members include the Alliance for a Green Revolution in Africa (AGRA), Bayer, Grow Africa, the International Finance Corporation (IFC), Rabobank, Syngenta, UN World Food Programme and Yara.

FtMA aims to transform existing agricultural practices through four strategic pathways, providing smallholder farmers with access to affordable finance, access to quality farming inputs, access to predictable markets and access to effective post-harvest management and other agricultural technologies. The commitment of FtMA is to empower 1.5 million farmers by the year 2022, using this comprehensive value chain approach. FtMA is operating in Kenya, Rwanda, Tanzania and Zambia.

Author Netlyn Bernard
More articles by Netlyn Bernard

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