Opportunity International's model for making a difference in agricultural finance

A 2012 report introducing Opportunity International's model for financing smallholder farmers:

Across Africa, a lack of access to finance for farmers limits the continent’s ability to take advantage of its abundant natural resources for food production. Smallholder farmers without collateral are unable to access the finance needed to purchase improved seeds, fertilizers and chemicals to optimize productivity.

Past efforts to finance agriculture in Africa have generally failed due to inappropriate lending policies, a disregard for external and internal market influences, a lack of understanding of farmers’ household pressures and a lack of coordination among key stakeholders. Sustainably financing agriculture in Africa requires comprehensive interventions that bring together various actors across value chains in order to meet the needs of different farmers.

In 2005, Opportunity International, in conjunction with the World Bank, launched an agricultural finance pilot in Malawi. Today they provide a range of financial services to smallholder farmers in Ghana, Mozambique, Rwanda and Uganda as well. Their strategy involves a comprehensive analysis with four key components:

1. An assessment of the farmer’s commercial potential based on the land size and household profile;
2. Partnerships and engagements to support players in the value chain including suppliers, NGOs, smallholder farmers, warehousing agents, and offtakers;
3. Providing a range of financial products tailored to meet farmers’ needs; 
4. Protecting banks and ensuring sustainability by adopting low­cost delivery channels, diversifying the investment portfolio, securing credit guarantees, and creating country­-specific agricultural models.

Not only do Opportunity’s financial packages equip farmers with the necessary services to move from subsistence to commercial farming, they help farmers feed their villages and ultimately their nations.