Project Everest

Social Consulting in Agriculture

by
Soni Lawson
Soni Lawson | Jul 25, 2017 | in Ideas Box

Hi guys, Soni here, from the Malawi July 2017 agriculture and social consulting assessment team.

 

I want to take the opportunity to share an idea looking specifically into micro financing and agriculture. First though, context! These past four weeks my team has worked to achieve our month long-goal to implement an experimental farm here in Blantyre, Malawi. We have successfully secured a one-acre parcel of land, through a partnership with the District Cabinet of Agriculture. Implementation of the farm will go forth in November. This experimental farm will improve the quality of life for the community, both in food security and income levels.

 

We found that most farmers had a problem of not growing enough produce or making enough harvest to sell or store, especially in the dry season. This is leading them to eat on average two meals per day, this is a current issue. That affects them in a detrimental way because farming is their main source of income. Through this I found that most women are not allowed to control the financial side of things, for example buying seeds/fertilizer and most women who were farmers are not aware of loans. If they can access a loan, they would get loans from their neighbors at cripplingly high interest rates of 20% and beyond.

 

found that when asking women what they would do if they had access to a loan, most said they would start a small business. This could be as simple as offer a micro-financing loan, which will allow women to have enough money to buy enough seeds to feed a family or help start a simple business of growing a home garden to sell and eat. This loan would not be reliant on the men buying seeds or dealing with finances on behalf of the women, but empowering the women themselves and therefore promoting greater independence and food security.

 

There is a lot of evidence around the world, including here in Africa, where microfinancing for women to start up local farming businesses provides value to the community, through increase revenue streams, greater gender equality and healthier outcomes for families by having a home garden or a loan to buy farming equipment and seeds and sell the harvest.

 

In regards to the ‘how’ of this idea, is not for Project Everest to be the primary organization to be the benefactor but to be the facilitator, similar to how the experimental farm works. Therefore having not cemented revenue or cost structure Starting off with a testing phase and see what works and how it works. In order to alter the loan process and starting a small business of a home garden.

 

This is an idea, which has been successful in other communities, and one that I see this as a potential here in Malawi because of the need in this community for better food security and higher income levels will support its positive growth.

 

Would love to hear what you think or have any advice you have.

 

 

Tagged users

Ella Grier Jul 26, 2017

I like how the theory and need for an experimental phase, that we have largely seen in farm ed, is being applied to a social consulting context. I would be interested to see how this is carried out.

My question is, if the experimental phase is a success, how does PE move from a 'facilitator' role to the 'implementor' and what will a business structure for Project everest working with African women in argo-business look like

Reply 1

William Lee Jul 27, 2017

Whether microfinancing will have true social impact will centre on one core issue: how can you minimise the level of risk for lenders so that the rate of interest can be minimised for borrowers? Where interest rates are too high, the social impact will be compromised by the financial strain of high repayment rates.

Do you see PE as being the social consulting advisor that links with microfinancing organisations to lower the rate of finance? I.e. by undergoing business training or by working with PE's consulting to lower business risk, microfinancing organisations will be more prepared to offer lower rates of interest. (see: https://projecteverest.crowdicity.com/post/389814 for a more detailed explanation). If so, how feasible would this idea be?

What are the current rates of interest being charged at a microfinance level? What criteria are being used before such organisations approve lending to farmers or other small business owners?

Reply 0

Seth Coetzee Jul 31, 2017

I really like the idea of integrating microfinancing with agriculture! Like you pointed out, women in the developing world often are disadvantaged in their access to loans for starting a small business, however I think in a broader sense, all developing world farmers have a lack of access to funds they can use to implement improvements (such as irrigation, pesticides, seeds, machinery, livestock, etc) and start businesses as a result of poor food security.

I think this concept also has the possibility of extending into some level of integration between social consulting and FarmEd, as in the developing world, agriculture is a major channel for entrepreneurship. Something I considered whilst on project in Fiji this last month was using the data we collect in FarmEd (via the patterns identified in the future smartphone app, trends in the consultancy service, and images from drones) to create a credit scoring system whereby we could measure the past and future harvesting ability for farms, and thus facilitate loans from financial institutions.

In regards to being a facilitator of loans for women, I think this a major issue we should be trying to solve. In terms of 'how', I think there could be the opportunity to use the proven results of our experimental farm blueprint in addition to the partnerships with institutions to try lower interest rates as a motivator until the loanee establishes some kind of credit score from our data algorithms.

Let me know what you think!

Reply 1

Georgia Jan 22, 2018

Hi Soni! Georgia from Social Consulting Fiji here. This is so interesting to read because this month we have been seriously looking at working in partnership with the FarmEd team here in Fiji.
As farmers go through the FarmEd workshops and purchase blueprints and their yield and profit increase, there is a real need for business knowledge at that point to assist with basic accounting and operational management.
We have definitely also recognised this need and the potential overlap between the two projects so looking forward to seeing how the teams in the upcoming months continue to work together!

Reply 0

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