The MasterCard Foundation's Rural and Agricultural Finance team recently commissioned the Social Innovation Consulting Group to conduct primary research on input credit in Tanzania and Uganda. The research answers two key questions including:
What is input credit? Input credit is a financial product specifically designed for the purpose of purchasing inputs, such as fertilizers or seeds. Input credit can take the form of either cash or in-kind (ie: inputs are provided on credit and the farmer reimburses the provider after harvest).
Why is the Foundation interested in input credit for smallholder farmers? Input credit products for farmers in Tanzania and Uganda are often much more complex in that they are ‘bundled’ with other compulsory services and fees. As a result, smallholder farmers may not fully understand the pricing structure and compulsory nature of bundled credit products, and may be taking on more risk than they can handle when engaging with providers of input credit. The objective of the study was to improve The MasterCard Foundaiton’s understanding of how agricultural finance can be delivered in a responsible way in line with the Client Protection Principles.
Analysis: Part 4 of ISF's and RAF Learning Lab's Pulse series draws insights from the evolving Technical Assistance (TA) landscape in agricultural finance.
