Solutions to Finance the Development of Family Farming: Collaboration’s Between Farmer’s Organizations and Rural Finance Institutions
This case study of SOS Faim dentifies the challenges faced in financing of family farms (FFs). It suggests that FFs could work as the most sustainable agricultural model to overcome poverty. However, rural financial institutions including banks and MFIs have shown little capacity to respond to the immensity and diversity of FFs’ needs. The study finds that developing relationships, connections, synergies, and collaboration between farmers’ and producers’ organizations, and rural financial institutions are essential keys for scaling up FFs. It provides the following recommendations to improve access to finance for FFs:
- Use a crosscutting approach to create a network of relationships between stakeholders to meet unmet financing needs and eliminate missing links;
- Build the capacities of farmer’s organizations and their members to redress the imbalance between the farming world and the world of finance when it comes to access to information and training;
- Develop concessional lines of credit to offer farmers interest rates that are compatible with the real profitability of agricultural activities;
- Create a guarantee fund as a risk management tool for agricultural production.