Working together on
microfinance and microinsurance
microfinance and microinsurance
Arnold, Christian and Vincent had already completed a long journey when they landed on the boiling hot tarmac in Ouagadougou on the Saturday at the end of November. When they left home, the temperature was no higher than 5°C, while here it barely drops below 30°C at night.
Vincent: “So we spent Sunday acclimatising. And further preparing the workshop we were to give on financing players in the onion and rice sector. After an exploratory visit in March, the Kaya Caisse Populaire asked us to organise a brainstorming session on the subject.
But why those sectors, you might be wondering? They were selected because they include not only commercial crops that generate an income for farmers but also food crops. And because they contribute to the food security and food supply of the local population. However, at the moment, the onion and rice sectors are insufficiently organised and have to cope with poor access to financial resources. So things have to be improved!
Together with the Caisse Populaire, which is committed to providing the farming population with access to financial services, we are analysing the main factors to be taken into account in order to develop credit products adapted to the needs of the players in the sectors, and evaluating the strengths and weaknesses of the Caisse Populaire.”
On Monday, they had a meeting with the onion producers’ association to ensure that exchanges during the workshop were as productive as possible. They heard how the production cycle is organised and about the risks and difficulties they have to cope with. Arnold and Christian, both agricultural engineers and active in the agricultural sector for 25 years, were all ears.
Vincent: “The onion producers invited us to visit their fields. To our great surprise, we arrived in a green oasis, even though the rainy season had been over for two months and we had only seen arid savannah until then. I was a little envious when I saw gorgeous peppers, aubergines and tomatoes next to the onion fields, which barely grow in my vegetable garden in Belgium.”
Vincent: “We started the workshop on Tuesday with our meeting in the back of our minds. We were lucky, because the participants represented the different key functions within the credit chain: from a credit broker to a bank manager. A representative of our NGO partner Trias, which provides support to rice and onion producer groups, was also present to act as a spokesperson for the producers.”
Tired, but satisfied with the mutual trust and the concrete action points they defined together, they concluded the workshop with a presentation of the conclusions to the delegation’s Director of Appropriations. Kaya’s Caisse is in fact part of the RCPB, a larger microfinancing network in Burkina Faso, which wants to spread the experiences of Kaya’s Caisse throughout the network.
On Friday, they were welcomed with open arms at the headquarters of the Kaya Caisse, where the people who participated in the workshop explained in detail how their institution works and what their respective tasks are. Arnold even took his first tests to become a credit broker on a moped!
Arnold: “So far, RCPB bankers have mainly focused on civil servants and small traders. They can provide salary information and other figures, and the return on their microcredit is relatively easy to monitor. The farmers find it much harder to obtain money; they are very poor and really need credit to cultivate their land. But many of them cannot read or write, and no figures related to their investments and returns exist. Therefore, MFIs are reluctant to give them loans.”
Christian: “Now it is also in the interest of the MFIs to reach out to the farmers. In the case of Kaya’s savings and credit association, it is even a necessity. In terms of financial services for white-collar workers and street vendors, the competition from commercial banks is very strong. However, 80% of Burkinese are farmers. That’s where the great potential lies!”
Arnold: “It is in the interest of farmers and the MFIs alike to take steps in each other’s direction. Farmers must learn to read and count, and receive financial education. It will enable them to supply the banks with figures on costs and expected returns. And the bankers must better manage and control the risks of agricultural credits, and learn when a project is or is not feasible. They have to recruit agricultural specialists, because it will only be possible to win over new customers among the farming community if farmers and bankers understand each other.”
Christian: “With more customers, MFIs can also reduce costs and spread the risk. And their liquidity will also improve, because a customer who obtains a credit is more likely to put his money in the bank concerned. So in Kaya, they have every reason to work with the farmers.”
Arnold: “The reactions of our partner’s staff in Kaya were already very encouraging. They thanked us a thousand times over. And they told us that they learned a lot and want to continue to do so. Of course, that also makes us want to return.”
Christian: “We will definitely go back. This cooperation is a long-term project. If it is successful in launching microcredits for farmers in Kaya, this initiative will be expanded to RCPB’s other credit associations. As long as we can contribute something, I am committed. In the end, as a human being, you naturally want to help others.”
Arnold: “By encouraging the bankers of Kaya’s credit association to invest in the agricultural sector, we sparked a flame. Now, we have to keep that fire burning!”
