Asset Financing at One Acre Fund

Published on

September 23, 2015

One Acre Fund's asset financing model offers solutions to the traditional disbursement and repayment regimes that rarely meet the needs of smallholder farmers:

Traditional disbursement and repayment regimes fail to meet the needs of farmers because their cash flows are lumpy, unreliable, and highly vulnerable to climate and the quality of their inputs. For this reason cash loans often do not improve productivity if farmers do not have access to quality seed and fertilizers to invest them in, or training to improve farming techniques.  

When faced with these challenges and very real household demands, it is difficult to ensure that cash loans will be used as an investment in agricultural activities and not as emergency funds to fulfill other needs.

One Acre Fund's asset financing model provides tangible goods to farmers, instead of cash, to increase productivity. The model is implemented in three key steps:

1. High quality farm inputs (seeds and fertilizers) are procured

2. These inputs are distributed to farmers

3. Farmers are trained on how to use the inputs correctly to increase yields

Not only does asset financing provide farmers with quality inputs and services they may otherwise not have access to, it ensures that the full amount of the loan is spent on increasing farm productivity and not on other household needs. One Acre Fund's loan product combines the power of high-quality inputs, smart loan distribution, and investment education to increase income and dollar impact.

About the Author(s)

One Acre Fund
Learning Lab Partner

The OneAcre Fund seeks to expand access to financial services and training for smallholder farmers in Kenya, Rwanda, and Burundi, ultimately enabling 181,000 additional poor farm households to improve their farming techniques, and increase their profits on every planted acre.

One Acre fund will also encourage microfinance institutions to expand into rural areas, helping pioneer and augment the capacity of a new sector of microfinance.  And the partnership strengthens OneAcre's core MIS and M&E systems, enabling continued improvement to its program design and greater cost efficiency in its operations, as well as increasing bandwidth to capture the most accurate and compelling evidence of impact. 

Browse One Acre Fund's own insights library.

Press release: One Acre Fund and The MasterCard Foundation Partnership