Mitigating the Risk of Lending to Agricultural Producers through Adaptive Loan Methodologies
Small-scale agricultural producers are often excluded from formal financial systems because they are considered “too risky” to financial institutions. In this session, the World Council of Credit Unions (WOCCU), will discuss the development of an innovative lending toolkit implemented with its partner national credit union associations in Guatemala and Kenya that reduces the risk of lending to smallholder producers. The lending toolkit is designed to minimize systemic risks by attracting new customers and providing alternative credit evaluation based on cash flow, specialized disbursement and repayment according to production cycles, value chain integration through market contracts, and loans bundled with technical assistance and insurance. WOCCU will discuss the different elements of the toolkit and demonstrate the use of CropIn: a digital agricultural and climatic monitoring tool that helps lending institutions and farmers monitor farmer’s field activities, historical data, and progress of crop growth and sales potential. Participants will also have the chance to role-play as different members of the value chain and observe a demonstration of how CropIn helps clients better manage their farm operations.
World Council of Credit Unions (WOCCU)