During its second phase, AgroBIG has engaged three Cooperative Saving and Credit Unions (COSACUs) in the target districts as partners in managing the revolving Women and Youth Loan Fund instrument (EUR 800,000). The funds are disbursed via the COSACUs to participating village Savings and Credit Cooperatives (SACCOs), who in turn issue working capital loans to individual women and youth members as well as to women and youth groups upon approved loan requests. To date, 11 SACCOs have received loan funds for 484 clients (of which 78% are women) to engage in business in AgroBIG selected commodities.
Local-level SACCOs are considered to have immense potential in financing short term loans for agricultural production- and off-farm income generating activities in Amhara. Nevertheless, their ability to serve their target clients is limited, as many struggle with low capacity and management. On the other hand, limited access to loan finance is one of the main constraints for women and youth agri-preneurs in the region.
AgroBIG aims to bridge these gaps by: 1) facilitating access to finance and financial services to youth and women in particular, 2) providing capacity building to SACCOs – for example training female members so that they are better positioned to take managerial roles, and 3) channelling funds to SACCOs, so that they may offer loans. SACCOs disburse funds according to their normal procedures, but observing the agreed AgroBIG Loan Fund Guidelines.
Making small loans available to women and youth farmers and MSME members of SACCOs provides them with the capital they need to be able to adjust their farming strategies and practices, make small investments in farming technologies, harvest and post-harvest technologies, processing, marketing and service provision activities. Importantly, it also builds the capacity of the SACCOs and their membership, while developing a savings and credit culture in the villages involved.