Innovating Agricultural Solutions to Meet Smallholder Needs, 18th Microcredit Summit, Abu Dhabi UAE, March 14-17, 2016

1. 3/23/2016 1
#18MCSummit
Innovative Approaches and
Models for Financing
Smallholders
Massimo Pera, Rural Finance Officer, FAO
Abu Dhabi, 15 March 2016

2. 3/23/2016 23/23/2016 2
#18MCSummit
Downscaling services from a commercial
bank: the case of Crédit Agricole du Maroc
Farms characteristics Financing System
10%
40%
Farms that are consistent with the
banking rules
Micro-farms developing off-farm
economic activities and that are
not consistent with the banking
rules
50%
Small and medium farms that rely
mainly on agriculture but are not
consistent with the banking rules
Moroccan farms typology
1,5 Million units

3. 3/23/2016 33/23/2016 3
#18MCSummit
Loans (million DH)
Number of SMF financed
• Access to banking services for 51.898
SMF
• DH 891 million of loans
• More than 100 000 ha financed
• 99% of loans without mortgage
guarantees, only with a document
justifying the link to the land (moulkia,
deed of purchase, deed of lease,
possession certificate, etc.)
• 242 agencies including 5 mobile
branches
40 070
Main Achievements (2014)

4. 3/23/2016 43/23/2016 4
#18MCSummit
Leveraging on informational advantages
of actors of the VC to design a tailored
financial instrument: the Case of NMB in
Tanzania
Gross demand in rural areas
(proxied by number of users
of informal financial
services)
-Identify the most significant
financial gaps in the credit and
savings markets
-Reflect on opportunities faced
by your FI in targeting gaps for
poor and richer client segments
Screen
expandi
ng
agricult
ural
markets
-Review trends by aggregate
and then single commodities in
terms of production,
productivity, prices, and exports
-Most dynamic commodities
proxy demand for financial
services among several client
types
-The VCF analysis mapped
producers, traders/agents,
processors, wholesalers,
retailers that are potential
clients
-Gained understanding of the
level of interdependency and
mutual arrangements
A
reduced
set of
potential
clients is
defined
Form a design team
for a specific client
target group

5. 3/23/2016 53/23/2016 5
#18MCSummit
Identifying the target markets through a thorough analysis leads
to value proposition-based products

6. 3/23/2016 63/23/2016 6
#18MCSummit
In-depth interviews with actors within each
focus value chain segment lead to client-
centered products
Critical insights for a successful
inventory credit product
- Need to adapt to recently
passed legal framework
- Need to assess governance
of AMCOs
- Warehouse operators need
to be licensed
- Focus on structured
marketing channels
- Direct contact with farmers
ensures trust and helps
foresee problems
- Need to build a tailored MIS
to manage client data and
monitor their performance

7. 3/23/2016 73/23/2016 7
#18MCSummit
The need for partnering with the public
sector: the case of the Cadena programme
in Mexico
Federal Government
State Government
Private insurance
companies
Public insurance company
Eligible farmers in insured areas
80-90% of premium
10-20% of premium
Indemnity for area
insuredCash transfers
Source: FAO, 2014

8. 3/23/2016 8
#18MCSummit
Thank you!
massimo.pera@fao.org
www.fao.org
www.ruralfinanceandinvestment.org