In each of the four countries, STARS has a specialized Market Systems Development (MSD) team partnering with the private sector, Producer Organizations (POs), the private sector and various government bodies to create lasting change for smallholder farmers. STARS’ strategy is based on three core pillars: Access to Finance, Value Chain Development and Monitoring, Evaluation and Learning.

1.Access to finance

STARS is partnering with 19 microfinance institutions (MFIs) in the four countries to develop innovative tailor-made financial products for smallholder farmers. STARS also builds the capacity of MFIs on better risk management by using the Agri-Credit Assessment Tool (A-CAT), developed by ICCO Terrafina Microfinance and ICCO Cooperation. The tool is used by MFIs to characterize the economic performance of a crop.  STARS also support MFIs in business planning and business plan development and in capitalization through deposit mobilization and international refinance.

By the end of 2019, STARS has supported MFIs to develop 20 new financial products, allowing more than 146,000 farmers to access finance through agri-group loans, agri-individual loans, warehouse lending, value chain specific credit and savings.

STARS supports MFIs to develop tailor-made credit products that fit the needs of smallholder farmers. So far, MFIs supported by STARS, reached 120,000 new clients in 4 countries. The average loan size is USD 167. “The MFI  Inkunga provided me with an agri-group loan through our cooperative, so this year I was able to get access to high-quality seeds and agro-chemicals. I also received fee-based agricultural trainings, which I paid for through the cooperative. I planted ½ hectare. And the crops look good this year, I expect to be able to reimburse my loan in only three installments. With the profit I’ll make, I’d like to plant more maize next year,” says Christine Nishyirimbere, maize farmer in Rwanda. 

Managing financial risks is key in unlocking farmer investments. This is why all MFI partners in the 4 STARS countries have been trained and made aware of the importance of risk management. This intervention will continue in 2020 and will be focused on the establishment or revitalization of risk maps, the establishment and / or revitalization of a risk management committee and a mechanism for analyzing the  agricultural credit portfolio. 

“We want MFIs to internalize their risk management, which will allow them to better assess their loan risks on a monthly basis, taking into account new risks related to agri-credit, partnership, digitalization, cash flow and liquidity,” Lassina Sanou, Country Lead STARS in Burkina Faso explains.

STARS supports MFIs through international brokering in the refinancing of MFIs. It also stimulates MFIs to promote savings based on women’s agri-groups. The promotion of savings is important for both the sustainability of MFIs involved in agricultural value chains as well as enhancing women’s empowerment.

“My savings group set up a joint savings account with the MFI from which we can get a loan. As a group, we determine a fixed amount for a given period that each member should bring to the savings meeting, following a plan agreed by the members. Thanks to STARS, I am not only able to save, I can also access a loan. I used this loan to buy quality inputs which increased my yield from 500kg to one ton,” KOIIKA savings group member Clementine Ukwitegetse in Rwanda says.

Through the market systems development approach, STARS is working to improve smallholder farmers agricultural skills and their position within the value chain. By providing them with access to (fee-based) business development services, and by linking them with input suppliers, farmers can increase their yields and income. STARS also links farmers to markets by building the capacities of 119 Producer Organizations (POs) and by organizing Business-to-Business events, bringing together the private sector, governmental actors, MFIs and POs. 

By the end of 2019, farmers received trainings on good agricultural practice trainings (80,000 farmers), were linked to markets and digital market information systems (more than 120,000), and received access to better inputs (40,000).

STARS developed a capacity building trajectory for each of the 65 POs, focussing on three areas: Improving productivity, coaching in business plan development and finding external finance, and improving the position of POs in value chains.

“We received training on how to improve the production of our members, through a training of trainers approach. We also received coaching on access to markets, contract negotiation skills, and working with contracts,” Jose Abeza, secretary of the Imparabaruta cooperative in Rwanda explains.

To help farmers access agricultural training and quality inputs such as fertilizer, pesticides, and certified seeds, STARS develops and strengthens input supply systems for both value chains.

The MFI in our village provided me with a loan and linked me to the Farm Service Center, so this year I was able to get access to high-quality seeds and agro-chemicals. I planted ½ hectare. And the crops look good this year, I expect to be able to reimburse my loan in only three installments. With the profit I’ll make, I’d like to plant more malt barley next year,” says Daba, malt barley farmer in Ethiopia.

One of the main challenges for producer organizations is to sustain agricultural training programs for their members once development partners or government support end their funding cycles.  By introducing the fee-based service provider, STARS supports farmers to receive training in exchange for a small fee.

“I am happy that I received training from my BDS provider. Thanks to this I have advanced skills in seedling preparation and identifying different types of pest and disease and how to control them.  I have better expectations for my production and I feel supported. Paying for a service that provides me with more profit is fine for me now,” farmer Claudine Nyirangirimana explains. 

STARS reinforces collaboration between producer organizations and private partners, for example by organizing Business to Business events. Producer organizations can pitch their business plans that they developed with STARS support. 

“STARS connected the producer organizations of cowpea farmers to us. An official agreement has now been signed linking the farmers with the bakeries. 100 Bakers committed to include at least 22% of cowpea flour in their bread making. Creating these strategic linkages has opened up huge market opportunities for cowpea producers, who will see the demand for the cowpea increasing. And thanks to the agreement, bakers will be assured of stable inputs for their bread,” explains Idrissa Ba, country lead STARS in Senegal.

his has been set up following a ‘PERL’ approach: Program-Embedded Reflection and Learning. STARS focuses on short adaptive learning cycles with program staff. A Theory of Change for each program country was developed, and linked to Key Performance Indicators to track performance. Simultaneously the STARS team created a Learning Agenda consisting of case studies that meet an information need experienced by program staff, or that can help to better understand program effects. An important component in the new PERL strategy is the quarterly program review meeting in each country linking learning and reflection to adaptive management.