Microfinance and Producers' Organisations: Roles and Partnerships in the Context of Liberalisation

This paper explores the relationship between microfinance and "rural producers' organizations (RPOs)".

The paper states that:

• The scope of RPOs has developed greatly in most African countries, leading to a progression in the farmers' capacity to lead economic actions and participate in agricultural policy;
• RPOs have imposed themselves as actors and full partners in many African countries;
• Bilateral and international cooperation agencies are interested in the roles RPOs play in setting up and running support services for farmers.

However, RPOs have varied approaches to participation in agricultural finance. These include:

• Separating the function of financing from the other forms of development support. This approach:
  • Defines RPOs as potential "clients" of the financial institutions;
  • Does not allow them to intervene in the implementation of the financial services.
• Believing that strong links between the functions of finance and technical support strengthen economic projects, increase their viability, and contribute to the sustainability of the financial service;
• RPOs often take on the job of financing, creating ad hoc savings/loans systems.

The paper:

• Presents the situation of the RPOs in West Africa and their perception of agricultural financing;
• Analyzes the various ways in which West African organizations are involved in supplying financial services, presenting the specific problems related to each and their prospects for change;
• Concludes by examining possible forms of partnership between microfinance and the RPOs.