Innovating Agriculture Business Models

We’re testing and promoting innovative business models that help the delivery of climate smart agriculture.

Zimbabwe: Finance for Zimbabwean Outgrowers

Project Ref Number: 6924-A009

Active period and status:
Project in contracting stage – grantee identified, negotiations completed.

Objectives:
The project aims to test a different approach to enabling smallholder farmers to use CSA. It will do this by addressing three critical bottlenecks limiting smallholder diversification into climate-smart cash crops in marginal areas:
• Limited financial service availability
• Weak or absent input and output market linkages
• Lack of information and technical advice on CSA practices

Gender Transformation:
This project is focusses on increasing the uptake of CSA practices while particularly targeting women’s economic empowerment.

Summary Approach:
Vuna will partner with commercial banks to provide smallholder farmers with better access to input credit, for climate smart cash crops that are suitable for drier regions of Zimbabwe. To achieve this, the project will establish a risk-sharing credit portfolio guarantee facility, working with the Zimbabwe Agricultural Development Trust (ZADT), that underwrites up to 50% of the credit risk of lending to smallholder farmer groups. The facility design will enable the ZADT to diversify its lending portfolio towards smallholders in semi-arid regions of the country. The project will work with input suppliers, commodity off-takers and extension agents to strengthen outgrower arrangements with smallholder farmer groups in the production of mung beans and sesame, two cash crops that are drought tolerant and short season and hence suitable for semi-arid areas. It will strengthen delivery systems in the value chains for sustainable provision of support services to smallholder farmers in order to enable them to adopt CSA practices.