Financial inclusion seeks to widen access to financial services to poor which reduces inequality and promotes social mobility. With access to loans, savings, insurance, smallholders are better able to manage risks save money for emergencies and invest in education and business opportunities.
This approach promotes saving culture among the smallholders in the Commercial Villages and facilitates partnership development with financial institutions to access financial services.
The Commercial Village Savings and investment scheme is based on income from commodity sales facilitated through the collective marketing. With increased and predictable incomes, households deliberately set aside savings on regular and predetermined basis with targeted investment objective including input acquisition, family medical care, education and clothing among others.
The approach integrates women, youth and other rural poor who mostly are vulnerable to financial exclusion and ensures that they play an active role in the utilization of the savings. The buildup of savings demonstrates proven cash flow for farmers which is attractive to financial institutions as a basis for lending.
Additionally, regular savings by farmers and proper record keeping inculcates a financial discipline that profiles farmers better to financial institutions. Kafulama Commercial Village smallholder farmers realized sales worth over USD 7, from collective marketing under the Malawi Potato commercialization Programme supported by IFAD and implemented by Farm Concern International, FCI in partnership with Ministry of Agriculture and market partnerships with traditional informal wholesale buyers and processing companies Read More.
