Risk-sharing models increase market access and financial and non-financial services to farmers
Developing risk-sharing models or strategic alliances with farmers, agribusinesses, and financial institutions in value chains can effectively increase access to markets and expand outreach of financial and non-financial services to farmers underserved by formal financial institutions. After understanding the existing financial relationships among farmers and agribusinesses in different value chains and contexts, innovative risk-sharing models were developed. Experiences gained developing and pilot-testing these models provide practical examples of how financial institutions, agribusinesses and market facilitators can work together to reduce the risks and costs of lending to small farmers, while capitalizing on the benefits. Risk-sharing models were pilot-tested by Caja Nor Perú (CNP), Financiera El Comercio A.S.E.C.A. (El Comercio) and International Development Enterprises-India (IDEI) during the 18-month SEEP Network Practitioner Learning Program (PLP), Strategic Alliances for Financial Services and Market Linkages in Rural Areas. From this practitioner-led research, six main findings on how to develop risksharing models were drawn, and a topic previously unaddressed by rural finance research - the role of market facilitators in strengthening value chains and developing financing arrangements - was explored.Ananth, B., Barooah, B., Ruchismita, R. and Bhatnagar, A. (2004) The Blueprint for the Delivery of Comprehensive Financial Services to the Poor in India, Centre for Microfinance Working Paper Series, Institute for Financial Management and Research, Chennai.
Basu, P. (2006) Improving Access to Finance for India's Rural Poor, World Bank, Washington DC.
Chavez Wendorff, D. (2006) New Experiences in Agricultural Financing: Case of Red Pepper, voice-recorded PowerPoint presentation for the SEEP Network Annual Conference, Washington DC.
Diaz Villeda, L. and Hansel, J. (2005) The Missing Link in the Value Chain: Financing for Farmers and Rural Entrepreneurs, SEEP Network and USAID, Washington DC.
Skeers, Jerry R. (2003) ‘Risk management challenges in rural financial markets: blending risk management innovations with rural finance.’
Wittlinger, B. and Mori Tuesta, T. (2005) ‘Providing cost effective credit to small-scale single crop farmers: The case of El Comercio in Paraguay’, Insight, no.19, ACCION, Washington DC.
Ananth, B., Barooah, B., Ruchismita, R. and Bhatnagar, A. (2004) The Blueprint for the Delivery of Comprehensive Financial Services to the Poor in India, Centre for Microfinance Working Paper Series, Institute for Financial Management and Research, Chennai.
Basu, P. (2006) Improving Access to Finance for India's Rural Poor, World Bank, Washington DC.
Chavez Wendorff, D. (2006) New Experiences in Agricultural Financing: Case of Red Pepper, voice-recorded PowerPoint presentation for the SEEP Network Annual Conference, Washington DC.
Diaz Villeda, L. and Hansel, J. (2005) The Missing Link in the Value Chain: Financing for Farmers and Rural Entrepreneurs, SEEP Network and USAID, Washington DC.
Skeers, Jerry R. (2003) ‘Risk management challenges in rural financial markets: blending risk management innovations with rural finance.’
Wittlinger, B. and Mori Tuesta, T. (2005) ‘Providing cost effective credit to small-scale single crop farmers: The case of El Comercio in Paraguay’, Insight, no.19, ACCION, Washington DC.
Ananth, B., Barooah, B., Ruchismita, R. and Bhatnagar, A. (2004) The Blueprint for the Delivery of Comprehensive Financial Services to the Poor in India, Centre for Microfinance Working Paper Series, Institute for Financial Management and Research, Chennai.
Basu, P. (2006) Improving Access to Finance for India's Rural Poor, World Bank, Washington DC.
Chavez Wendorff, D. (2006) New Experiences in Agricultural Financing: Case of Red Pepper, voice-recorded PowerPoint presentation for the SEEP Network Annual Conference, Washington DC.
Diaz Villeda, L. and Hansel, J. (2005) The Missing Link in the Value Chain: Financing for Farmers and Rural Entrepreneurs, SEEP Network and USAID, Washington DC.
Skeers, Jerry R. (2003) ‘Risk management challenges in rural financial markets: blending risk management innovations with rural finance.’
Wittlinger, B. and Mori Tuesta, T. (2005) ‘Providing cost effective credit to small-scale single crop farmers: The case of El Comercio in Paraguay’, Insight, no.19, ACCION, Washington DC.
Ananth, B., Barooah, B., Ruchismita, R. and Bhatnagar, A. (2004) The Blueprint for the Delivery of Comprehensive Financial Services to the Poor in India, Centre for Microfinance Working Paper Series, Institute for Financial Management and Research, Chennai.
Basu, P. (2006) Improving Access to Finance for India's Rural Poor, World Bank, Washington DC.
Chavez Wendorff, D. (2006) New Experiences in Agricultural Financing: Case of Red Pepper, voice-recorded PowerPoint presentation for the SEEP Network Annual Conference, Washington DC.
Diaz Villeda, L. and Hansel, J. (2005) The Missing Link in the Value Chain: Financing for Farmers and Rural Entrepreneurs, SEEP Network and USAID, Washington DC.
Skeers, Jerry R. (2003) ‘Risk management challenges in rural financial markets: blending risk management innovations with rural finance.’
Wittlinger, B. and Mori Tuesta, T. (2005) ‘Providing cost effective credit to small-scale single crop farmers: The case of El Comercio in Paraguay’, Insight, no.19, ACCION, Washington DC.
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