CGAP Case Studies in Agricultural Microfinance: An Overview

Publication Date: Aug 2005
Published by: Consultative Group to Assist the Poor (CGAP)
Document Type: Case Study

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Agricultural lending to the rural poor

This document gives a cursory view of the inherent constraints of lending to rural poor dependant on an agricultural economy. It states that delivering small-scale loans and savings mechanisms can be particularly challenging due to the following reasons:

• Low population density;
• Greater distance between clients;
• Poor transportation networks;
• Low income levels leading to impractical size of financial transactions.

The document presents a selection of synopsis of case studies, developed by Consultative Group to Assist the Poor (CGAP), that demonstrate how five financial service institutions have effectively responded to the challenges of providing sustainable financial services to poor rural agriculture dependant households. The institutions selected for the case studies are:

• Bai Tushum Financial Foundation, Kyrgyzstan;
• Caja Los Andes, Bolivia;
• Confianza, Peru;
• Cooperative League of the USA (CLUSA), Mozambique;
• Equity Bank, Kenya.

As per the document, the organizations, though found to have different characteristics, face similar challenges, and the case studies provide insights and knowledge to donors, investors and financial institutions that can assist them to improve upon their service offering to this segment.