Households who are underprivileged and face food insecurity have few financial options. The majority have historically relied on unofficial credit, typically with exorbitant interest rates. Peer-lending initiatives have shown promise recently as an initial step toward involvement by households with limited resources. Initiatives for village savings and loans of this kind are rapidly expanding, however most of them are small-scale loans with little focus on strategically addressing finance requirements in agriculture. Although they can present higher level lending opportunities, mobile banking and agricultural lending by microfinance organizations are becoming more and more popular. However, they can also present greater implementation challenges.

Using examples from mobile technology, microfinance organizations, and village savings and loans, this seminar examined the world of agricultural financing. The attendees were divided into three small groups to begin the program. One of the panelists facilitated a discussion that each group took part in. Following a fifteen-minute session, the groups switched around to provide each participant an opportunity to speak with the panelists about the three subjects. Following the talks in small groups, the group reconvened and three panelists for the group carried on the conversation with the full assembly.

The main discussions focused on three topics: 1) comprehending a variety of agricultural finance products and how projects are currently utilizing them, particularly mobile technology; 2) figuring out project resources and financing options that can be used to involve households experiencing food insecurity; and 3) identifying strategy interventions along a crop or livestock cycle where agricultural financing could lead to increased income.

Information Exchange

Improved information exchange is required regarding experiences with financial transfer systems in various nations and areas, working with banks and larger financial products in risky situations, and understanding how financial products, microfinance, and village loan groups operate and can adapt to complex social environments, such as those involving corruption and mistrust at the local level.

More details about the possible costs and advantages of various financial product and service types are required.

For practitioners to share ideas and expertise, there has to be a stronger connection between the financial services industry and the agriculture and food security communities.

More information about effectively removing cultural obstacles to financial product use needs to be disseminated.

Design of Programs

Village savings and loans, or VSLs, must be positioned to be an essential part of initiatives that promote food security and the continuum of economic improvement. Make sure resiliency methods incorporate them.

The design of the program must take into account the poor’s growing access to collateral. Farm assets, such as cattle, crops, and trees, may be pledged as security for a loan. Although this strategy isn’t already in use in Ethiopia, farmers might find it useful.

It is necessary to advocate for and within pastoralist communities for microfinance institutions.

Programming ought to facilitate the connections between microfinance and irrigation.

Programming should facilitate connections across financial service approaches, such as those that connect VSL associations to MFIs, mobile broadbanding and VSLAs/mobile wallets, or VSLAs serving as agents. It is imperative to cultivate connections with input and output markets in addition to financial service providers.

Through the use of mobile technologies and other strategies, programs should endeavor to further expand into remote and other rural areas.

Procedures

Need agreement on criteria for beneficiary entrance points and promotion about asset ownership, incomes, and skill levels for every kind of financial product or service. Additionally, there needs to be more agreement on when it is acceptable for people to transition from safety-net transfers to any number of these activities, particularly VSLs.

Examining consumer rights and safeguards and ensuring transparency in interactions, interventions, and programs are crucial as financial services techniques gain traction.

Studies and the Body of Evidence

Researchers ought to examine the advantages and disadvantages of different financial instruments in the context of pastoralists.

Reliable impact evaluations are required to determine how various financial services, products, and strategies—like internal lending communities (SILCs), VSLAs, and savings—affect household assets and incomes.

More proof is required to understand how financial services affect the availability of food. Improved food security and nutrition outcomes are not always correlated with higher wealth.

Strengthening Capacity/Tools

Further microfinance training and capacity building for program implementers and staff is required, followed by community-level training.

To evaluate how VSLAs and SILCs affect the security of household nutrition, certain instruments and methods are required.

Donor Guidelines and Procedures

Missions must investigate the various scenarios in which financial goods might be integrated with agriculture. The best strategies can vary depending on the situation.

In South Sudan, microfinance is incredibly underdeveloped. Both the rate of urbanization and the resource depletion of migrants are extremely high. Funding from donors must be injected into the MFI and microbanking sectors.