Rabobank Foundation and the World Bank team up to strengthen financial cooperatives for agrifinance
May 2, 2016 Editor 0
The World Bank and Rabobank Foundation are teaming up to strengthen financial cooperatives in rural areas to improve financial services for smallholder farmers and agricultural SMEs.
Financial services in rural areas are scarce and expensive. Servicing smallholder farmers spread across wide geographical areas isn’t attractive to mainstream financial institutions as their transactions are small, their cash flows seasonal and returns on investments can be risky due to potential crop failures or weather calamities.
To get access to savings and credit, rural households and farms often establish cooperative financial institutions (CFIs). While CFIs have a strong local presence and knowledge, they often have weak institutional capacity and governance, lack access to information technology, and suffer from political interference. Also, the laws regulating CFIs are often inadequate and supervision is weak, all of which hampers CFIs’ ability to deliver financial services. Often, CFIs don’t fall under the purview of the main financial sector regulator and supervisor, but of other entities that don’t always have the required capacity and expertise.
- Pensions, power & development performance
- Making climate finance work in agriculture
- Is Africa ready to climb the value chain in agriculture?
- Economic marginalization of minorities: Do laws provide the needed protections?
- Financial Inclusion Up Close in Rwanda
- Why are payment services essential for financial inclusion?
Categories: World Bank PSD
Subscribe to our stories
- The renaissance of farming systems research in Africa January 16, 2018
- Entrepreneurship competition encourages the Malian diaspora to start businesses on their home turf January 16, 2018
- India: Digital finance models for lending to small businesses January 16, 2018
- Powering up Africa through innovation January 16, 2018
- Which ones did you read and download?Africa RISING’s most popular online products and resources in 2017 January 16, 2018