Does inclusive finance exclude agricultural producers ?

I am not sure if this title is really what was meant with the presentation given by a federation of cooperatives from Niger, FUCOPRI.

INFINE, the Inclusive Finance Network in Luxembourg, had invited Thierry Defense, Director of SOS Faim who moderated a presentation and Q&A session with Mr Ayouba Hassane, Director of FUCOPRI (Federation of Rice Producers Coopératives Niger).

FUCOPRI is a federation of 9 unions of 37 cooperatives of rice producers in the Niger river valley.  The federation has been fairly active in accessing loans from banks and other entities which are channeled via FUCOPRI to its members.

So does inclusive finance really exclude farmers ? I am personally not convinced. There is a lot of effort being made by the development community to better structure agricultural loans to adjust them to the payment patterns of a farmer. In a project for which I spent around 4 weeks in Nigeria in October/November 2014, yes, banks and microfinance institutions were too risk averse, did not have outlets in rural areas, where not adapting their products to the realities on a farm. However, also farmers had strong prejudice against formal credit providers, e.g., they are too expensive, they are too stringent when recovering their loans (well….). Many farmers do not have an idea about the profitability of their farm, so the loans is too expensive compared to what?? When calculating their yearly revenue and profit, many of them could have easily repaid a loan with a 20% annual interest rate.

So the question is not easily answered and it would be worth conducting a profitability analysis of many farms, agricultural products, etc. so that we stop talking into the blue, but can actually support statements with numbers. Also farmers have to learn to manage their farm like a business. There are expenses and even their own work has to be priced. Produce should be sold at a coherent price and maybe even stored until prices rise again.

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