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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. |
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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 |
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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. |
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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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