Community rotating savings group helping smallholder farmers solve access to credit
Access to credit from formal banks is limited for smallholder farmers due to high interest rates, difficulty in gathering the required documents, and other factors across Africa.
- smallholders
- Climate Change Mitigation
Access to credit from formal banks is limited for smallholder farmers due to high interest rates, difficulty in gathering the required documents, and other factors across Africa. Through savings and rotative credit groups, communities, mainly women and youths, can save money for a long time and access loans (credit) that allow them to improve and invest in agricultural production and carry out other important projects in their lives, such as building and furnishing their homes and investing in their children’s education.
Within the scope of the AID-I project, savings and rotative credit groups are being created and restored to make money more accessible to families in the communities. These groups involve smallholder farmers from the districts of Malema, Mecuburi, Mogovolas, Monapo, and Ribáuè in the province of Nampula, and from Alto Molócuè, Gurúè, Ile, and Mocuba in the province of Zambézia, in Northern Mozambique who receive financial education focused on credit management.
The groups are made up of 20 to 35 members who meet once a week to save a certain amount over the course of a year. The savings process also includes loans and a social fund that any member can use in emergencies.