5 Years of STARS: The Future Looks a Lot Brighter for 330,000 Farmers
After five years, the ICCO Part of Cordaid STARS program is coming to an end. To measure the impact of its interventions, The Royal Tropical Institute (KIT) performed an evaluation study in two out of four STARS countries; Rwanda and Senegal. Using an Outcome Harvesting (OH) design, the study found conclusive evidence that the STARS program has positively impacted the life of the farmers STARS worked with in both countries.
This impact was achieved through a set of interventions ranging from capacity development for microfinance institutions (MFIs) and producer organizations (POs); the design and implementation of business development services; improving market access and input supply for farmers; the design of loan products that are tailor-made for farmers; supporting MFIs and POs to attract capital; and last but not least; by making sure that all lessons learned along the way were captured and shared with partners and the wider development community.
The STARS approach
STARS seeks to change the way that markets work, so that smallholders are included in the benefits of economic growth and development. The STARS country teams did this by strengthening both the financial and private sector in a way that creates large-scale and lasting benefits for its clients.
Overall, the program impacted more than 330,000 farmers and worked with 23 MFIs to develop loans that are tailor-made for farmers in Burkina Faso, Ethiopia, Rwanda and Senegal.
Loan product development
The study showed that loan product development was one of the most successful interventions introduced by STARS. It focuses on solving one of the biggest problems in smallholder farming: access to financial resources adapted to the needs and possibilities of the farmer, allowing access to quality inputs. The adapted credits and innovations around group solidarity loans, warrantage and solar panel loans have solved many of the problems faced by farmers. Financial data show that these products also affected MFIs positively, expanding their agricultural portfolio, in particular in Rwanda where climatic conditions are generally more favourable for agriculture.
To support the development of crop-specific loans, STARS introduced the agri-credit assessment tool (A-CAT). This enabled partner MFIs to better understand the needs and capacities of smallholder farmers and minimize the risks of defaulting / non-repayment of loans. Using the tool, loan officers were better able to analyze the exact costs associated with crop production and grant loans accordingly.
“MFIs have become champions in client social protection, because A-CAT helps them to do agriculture loan analysis and to give farmers loans that they can pay back. This means that farmers are protected from over-indebtedness”, said Patricie Uwimbabazi, a microfinance consultant with the STARS program.
In addition to loan product development, STARS assisted MFIs with the development of credit- and risk assessment tools, manuals and methods of delivering these services. Knowledge of agronomy was also increased at individual and organisational levels.
“The most important thing we learnt from ICCO was that farming is unlike other businesses. So we created loan products that were crop-specific”, said Yves Mfura, the agrifinance lead in Umutanguha MFI. “If it’s rice we give seven months, if it’s potatoes we give four months and three months for vegetables. The farmer then has the flexibility to pay back their loan when they harvest.”
POs also improved their services to members, most interestingly by introducing new forms of agronomic extension and taking up production roles in the seed sector, more transparent governance, and better linkages to the markets. For all these outcomes, POs have had to train their staff and adapt their management structures, which they did effectively with STARS’ assistance.
Gender-specific activities have often improved women’s access to positions of control, credit delivery systems and value chains, both in Senegal (cowpea and onions) and Rwanda (rice and maize).
“ICCO supported our cooperative to put in place a gender committee to resolve conflicts and empower its women members to participate more actively in the affairs of our cooperative, take charge of their production and understand their right to earn and manage the money they got paid for their rice yield. As a result, women started taking leadership roles, vying for positions alongside men in the governance committee”, Consolee Mukamana, member of COPRIMU rice cooperative explains.
Would you like to find out more about STARS impact in Senegal and Rwanda? Click on the report to access the executive summary of the KIT evaluation.
Strengthening African Rural Smallholders, in short STARS, is a five-year (2017 – 2021) project of ICCO in partnership with Mastercard Foundation and ICCO Terrafina. Through a market system development approach the project focuses on improving access to finance and markets for more than 200,000 smallholder farmers in Ethiopia, Rwanda, Senegal and Burkina Faso. The project plans to have an overall impact in the lives of more than 1 million people.
For more information about STARS, click here.