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The Farmer’s Equipment Credit

Topic :

This article notes that when asking organisations representing agricultural farmers and peasants about the obstacles they find regarding the financing of family farms, the problem of medium and long-term credit allowing investment usually comes first. The case of Kafo Jiginew in Mali, a bank created and owned by farmers, where equipment credit has been implemented for over 10 years is discussed here.

The article presents the main conclusions of a study on impact carried out by IRAM (Institute for Research and Application of Development Methods) on behalf of SOS Faim of Kafo Jiginew’s experience. The main objective of the study was to come up with viable proposals for an improved medium-term credit within the network.

After providing some background to Kafo Jiginew, the article discusses the reimbursement rate of the equipment credit. It then provides a brief examination of recipients of the equipment. The bulk of the article then sets out an analysis of impact and discusses lessons learnt and challenges. The impact analysis is broken down into three sections: the economic impact, the social impact and the institutional impact.

The article then ends with the following questions:

  • The risk issue: does the longer duration of equipment credits involve a higher risk factor for the microfinance institution given the stronger threat of unfavourable contextual change?
  • A mass medium-term credit policy is more difficult to implement due to scarce resources, higher average amounts and the more favourable rotation of these. Does a less visible impact at the meso economic level imply a brake to the diffusion of the tool?
  • Precisely concerning the difficult mobilisation of long-term resources, what internal and external strategies should microfinance institutions implement in order to alleviate such deficits?
  • Finally, what strategy should microfinance institutions implement so that a product like equipment credit goes hand in hand with a dynamic of socioeconomic change and technological innovations?
  • Resource type
  • Author Marc Mees
  • Organisation
  • Year of Publication2003
  • Region
  • LanguageEnglish
  • Number of pages8 pp.
  • EditionZOOM Microfinanzas

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