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SOURCES OF CREDIT
| 1. | Contracting exporter: Exporters or buyers of smallholders' crops may provide credit in kind in the form of inputs in return for crops grown under contract. Often this service is supplemented with general advice on crop management and specific technical guidance on the use of purchased inputs. In some cases, a contract serves to assure a private lender of the smallholder's creditworthiness, thus facilitating access to private credit. |
| 2. | Savings and credit schemes: Smallholders deposit up to 25% of the value of the loan in a saving account, and the remainder is provided on credit |
| 3. | Group schemes: Specialized micro-finance institutions may support groups of smallholders to set up 'group liability' schemes. Responsibility is taken collectively to cover each member's liability to repay. |
| 4. | Agricultural suppliers: Exporters or buyers supply inputs on credit to appointed suppliers in the growing area, who then take responsibility to supply the inputs to smallholders. |
Related
information:
(1) Screening and selection of borrowers
(2) Key Sheets' provided by the UK Government's Department for International Development. The purpose of these sheets is to provide decision makers with an easy and up-to-date point of reference on issues relating to the provision of support to smallholders.
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Natural
Resources Institute 2003