Water and Microfinance: The Case of U-IMCEC in Senegal

This case study discusses the methodology adopted by U-IMCEC in piloting the Water and Microfinance Initiative (WMI) in Niayes, Senegal. WMI was launched in 2012 and it aims at facilitating access to productive water irrigation for small-scale family farmers who are also clients of rural MFIs. The goal of the initiative is to secure crop production, improve productivity, increase cultivated areas, boost profitability of operations, and sustainably increase producer’s income. The study reviews the need for productive water and the approach used in providing irrigation solutions adapted to both the needs of small farmers and specific environmental risks. It also highlights obstacles and lessons learned during the pilot phase. Key lessons include:

• It is important to break down barriers across sectors as currently there is no or little interaction between the worlds of finance and irrigated agriculture;
• There is a need to integrate environmental assessment into economic development projects;
• It is fundamental to have a dedicated team with outreach workers who have the necessary expertise, as well as adapted products and procedures;
• Appropriate incentive systems that value the extra efforts required to develop a portfolio of innovative loan products should not be overlooked.