In the July-August 2010 issue of World Finance magazine, Deborah Foy of Opportunity International UK discusses how Opportunity’s agricultural finance program in sub-Saharan Africa is empowering smallholder farmers with microfinance solutions like savings, insurance and loans.
“With 65 percent of the sub-Saharan African labor force employed in agriculture, according to the World Bank, the importance of the sector to the economy is clear. Agriculture provides 32 percent of gross domestic product in the region. Opportunity International works in countries where the percentage of the labor force involved in agriculture is high. In Kenya, Malawi, Mozambique, Rwanda, Tanzania and Uganda, more than three quarters of workers are employed in agriculture.”
Most smallholder farmers struggle to make ends meet on irregular incomes and so microfinance products can fill in gaps. Loans provide working capital at the beginning of the growing season. Savings products help them pay bills and feed their families until the harvest season, protecting them from having to short-sell their crops for less than their value or turn to loan sharks for credit. Weather-indexed crop insurance helps provide a safety in the case of drought or flood that might lead to crop failure or loss of livestock.
Malawian smallholder farmer Amosi Kasimira (pictured above, on bicycle) is a client of Opportunity International Bank of Malawi (OIBM) who is able to provide a better life for his family through our agricultural finance program. Two years ago, Amosi couldn’t afford fertilizer or much seed and was struggling to grow enough maize to feed his family. Since joining Opportunity’s agricultural program, he has seen a five-fold increase in his family's income. Having successfully repaid his first loan, Amosi took another and is producing more maize than ever before. He's also using his loans to increase the size of his plot and to access fertiliser and seed. With hard work and determination, and training in best practice agricultural techniques from Opportunity’s agricultural workers, his small farm has increased its yield from ten bags of maize to 150 bags (approx. 1,000 lbs. to 16,000 lbs). He has enough to feed his family and a surplus to sell, and the increased income has enabled the family to afford clothes and school fees. He has also been able to open a secure, interest-bearing savings account with Opportunity to protect his cash.
Read more about the impact of Opportunity's agricultural finance program. Download World Finance article
