Community Led Agricultural Financing

Summary By the end of the session…. 1.What is community led financing 2.Why is important within MYAP’s 3. How can they be strengthened to support agricultural and nutritional outcomes?

What is Community Led Agricultural Financing? VSL (Village Savings and Loans) groups provide a mechanism for rural households to save money and receive credit in a transparent, structured and self-managed environment within their community. There are few, if any, opportunities for rural households to obtain credit or save their earnings in formal financial institutions or in a protected manner. Credit is necessary for purchasing farming inputs and starting small enterprises while savings are essential for dealing with shocks and limiting the effect of the hungry season.

Why is it important within MYAP’s ? It provides a means by which members can address food insecurity throughout the year by (1) savings for use during the hungry season to buy food (marco and micro nutrients) (2) loans for agricultural activities that will increase availability, access, utilization, stability

Opportunities for Strengthening How can the VSL concept be strengthened to support agricultural and nutritional outcomes?

Opportunities for Strengthening Group Work Using the supply chain and marketing interventions from the last session continue your work to identify potential interventions by the strategic use of VSL financing.

2.Labor-production,harvest , processing , preparation Potential interventions in each part of the chain that can be address through short term financing inputs: 1.seeds/ planting material (cuttings) tree seedlings , agro-inputs fertilizer, hand tools, etc. (sell/buy), 2.Labor-production,harvest , processing , preparation 3.storage place (to add value) 4. transport to add value instead of farm gate, 5. Support a community member as buyer of product All of those can be done within the existing framework on loans within most VSL charters. VSL (Village Savings and Loans) groups provide a mechanism for rural households to save money and receive credit in a transparent, structured and self-managed environment within their community. There are few, if any, opportunities for rural households to obtain credit or save their earnings in formal financial institutions or in a protected manner. Credit is necessary for purchasing farming inputs and starting small enterprises while savings are essential for dealing with shocks and limiting the effect of the hungry season.

Let’s look at potential interventions in each part of the chain that can be address through short term financing inputs: 1.seeds/ planting material (cuttings) tree seedlings , agro-inputs fertilizer, hand tools, etc. (sell/buy), 2.harvest (paying for extra labor) processing fee to add value, 3.storage to add value, 4. transport to add value instead of farm gate, community buyer of product) All of those can be done within the existing framework on loans within most VSL charters

Community led financing? Best practice principles for VICOBA / VSLA http://typo3.fao.org/fileadmin/user_upload/drought/docs/Working%20group%20VICOBA%20-%20VSLA%20Good%20Practice%20Principles%20DCM%20workshop%20addis.pdf

This presentation was made possible by the generous support of the American people through the United States Agency for International Development (USAID). The contents are the responsibility of Save the Children and do not necessarily reflect the views of USAID or the United States Government.