Launch of manual on Group Solidarity System for Producer Organizations

Agricultural producers organizations in Rwanda face a number of challenges including low productivity of members, limited access to markets for their products, lack of adequate management and limited access to finance. Access to a comprehensive range of financial services is a significant challenge for smallholders, who constitute the vast majority of farmers. Access to finance is also critical for producer organizations to ensure funds for farm investments in productivity, improve post-harvest practices, and facilitate aggregation of products to enable better access to markets. The formation of solidarity groups within producer organizations can assist to improve the performance on governance, production increase and linking to markets for POs.

New approach: Group solidarity system in producer organisations

ICCO with Farm to Market Alliance (FtMA) developed and tested a new approach to stimulate group savings as well as to enhance access to input loans by producer organizations. The new model organizes smallholder farmers in solidarity groups to promote savings. In turn, new approaches to improve the access to finance for producer organizations were developed, which link solidarity groups to micro-finance institution and Savings and Credit Cooperation Organisations (SACCOs).

The objective of the solidarity groups system in producer organisations is to boost the cohesion and ownership of the members and to strengthen member’s savings and access to financial services especially for input loans. It also assists to increase the liquidity/capital position within the cooperatives. It can ultimately promote stronger and sustainable relationships between producer organizations and financial institutions.

The system improves the trust of financial institutions in the cooperative and its members, since the microfinance institution (MFI) can link directly with cooperative members for savings mobilization and input loans.

Workshop and manual launch

During a workshop on February 14, the manual was launched. Opening the workshop, the Deputy Country Director of World Food Program Rwanda, Abdurrahim Siddigui said  “If farmers are supported, they can produce more, which will make the market price affordable and more people can access food”. He commanded the efforts of ICCO and the FfMA program in making market work better for farmers and supporting farmers access finance.

“Being part of a solidarity group is one way for farmers to easily and quickly access cash so they can invest in their farming activities and ensure food security and a higher income for the whole family. And, it’s not just about money, it’s also about togetherness and supporting each other especially in difficult situations”, explained Netlyn Bernard, Rwanda Country Manager,

During the event ICCO and WFP shared their experiences on the significant change that this new approach triggered.

The practical manual provides guidelines for program staff, leadership of producer organizations and staff of MFIs  and can be of use in other value chains and in other countries.

The event brought together different stakeholders and experts in agricultural value chains, financial services such as financial institutions and development organisations.

ICCO has been working with WFP for the last 3 years on enhancing access to finance for producer organizations in the maize value chain, under the Farm to Market Alliance (FtMA) program. In Rwanda, ICCO is working on the development of value chains and their link with financial services, as well as the development of business models for market-based producers.

More on Farm to Market Alliance (FtMA) on this link: https://ftma.org/

Manuals:

• Manual Introduction of group solidarity systems in producers organisations
• Manual – Basic Financial litracy