Agriculture is a risky business by nature. Weather conditions impact harvests and market conditions determine food prices, leaving farmers with unsteady income.
Microloans play an important role in helping farmers around the globe subsist during lean seasons and prepare for the next planting. Many traditional microloans, though, have rigid repayment schedules that are better suited for other business models, and don’t address some of growers’ key needs, like access to technology.
To better serve small-holder farmers in developing countries, microfinance leaders including Kiva and its network of field partners have introduced new types of agriculture loans designed to multiply the impact and sustainability of lending.
One feature of these innovative agriculture loans is flexible repayment terms. This means borrowers enjoy longer repayment periods or repay the loans when they have an influx of cash, rather than being locked into a monthly timetable.
Some organizations offer loans that come in the form of products or services instead of money. In-kind loans might include seeds and fertilizers that are purchased in bulk and off-season to maximize savings. They can also be for larger productive assets, such as cows or processing equipment, or even for technology like cellphones which can be used as information hubs for communities of farmers.