Advancing Credit Methodology and Risk Management in Agricultural Lending Amidst the Challenges of Climate Change in Panama

This publication shares lessons from a technical assistance program supporting Soluciones de Microfinanzas S.A. (Microserfin) to strengthen its agricultural lending and risk management systems for smallholder farmers in Panama. It shows how combining investment with targeted support helped develop a standardized credit assessment framework that integrates production data with cash-flow analysis, improving underwriting, efficiency, and risk management in climate-vulnerable portfolios. Key results included tailoring loan products to agricultural cycles, embedding climate-smart features, and building partnerships with sustainable agriculture providers to expand outreach while managing risk.

For practitioners, the report highlights the importance of leadership commitment, staff training, and piloting tools before scaling. It demonstrates how technical assistance can support MFIs to redesign credit policies, digitize processes, and integrate agricultural risk into core systems. Overall, it offers practical guidance on building climate-resilient, customer-focused agricultural finance programs through partnerships and blended finance.