NOMSA NKANA, Lusaka
THE International Development Enterprise (IDE) has established a financial guarantee mechanism that allows suppliers to provide farmers with seeds and fertiliser on credit.
IDE is an international locally-based organisation which supports Zambia’s small-scale farmers through agricultural advice, smart water management, and mobile technology solutions to increase market access and, ultimately, farm household incomes.
According to a statement posted on the IDE website, development of the mechanism has been necessitated by various challenges that hamper farmers from accessing financial services.
“Supporting access to financial services in Zambian rural communities is particularly challenging.
“Low population density and extremely poor infrastructure, compounded by low productivity, make it difficult and expensive to offer loans to small-scale farmers,” IDE notes.
IDE is also training seed suppliers to build crop insurance into the price of their products, providing a safety net by enabling farmers to receive compensation if they lose a crop due to drought or floods.
Under capacity development, IDE is training and recruiting farm business advisors (FBAs), who are entrepreneurs supporting small-scale farmers to grow crops that can be sold for attractive returns.
“Over the next two years, IDE will explore how best to strengthen and formalise FBAs through an efficient business model that allows FBAs to attract investment and make wholesale purchases to pass on group discounts to farmers,” the statement reads.
It notes that access to lines of credit would enable FBAs to buy and sell inputs like seeds and fertilisers to their farmer clients.