Financing Family Agriculture in the Context of Liberalisation: How Can Microfinance Contribute?

This paper presents a summary of discussions at a conference that explored how microfinance can respond to agricultural financing needs in the context of liberalization.In the present context of Southern economies' liberalization, lack of access to finance remains a major constraint to the development of family agriculture. Despite microfinance's closeness to the rural community, MFI products have not satisfied agriculture's specific financing needs. The high risk involved in agriculture and its need for medium term financing make MFIs hesitant to lend.

Conference participants concluded that microfinance can increase its contribution to financing family agriculture by:

• Upstreaming and modernizing the agricultural and microfinance sectors, and making them more secure;
• Adapting microfinance to agricultural demands and constraints;
• Improving agricultural credit safety;
• Decompartmentalizing the microfinance sector and strengthening its financial market presence;
• Increasing awareness among political bodies and donors about the necessity to support agricultural microfinance;
• Strengthening farmers' organizations and MFI alliances;
• Harmonizing public policies.