Approaches

Agricultural credit and start-up funding for small-scale irrigation cooperatives [Mali]

Crédit agricole et fonds de démarrage pour les coopératives dans l’irrigation de proximité

approaches_2508 - Mali

Completeness: 83%

1. General information

1.2 Contact details of resource persons and institutions involved in the assessment and documentation of the Approach

Key resource person(s)

SLM specialist:
SLM specialist:

Dembele Célestin

celestin.dembele@helvetas.org

HELVETAS - Swiss Intercooperation

Mali

SLM specialist:

Doumbia Moussa

mtdoumbia@yahoo.fr

Association for the Development and Protection of the Environment (ADEPE Mali)

Mali

Tamini Jacques

jacques.tamini@helvetas.org

HELVETAS - Swiss Intercooperation

Mali

Name of the institution(s) which facilitated the documentation/ evaluation of the Approach (if relevant)
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH (GIZ) - Germany
Name of the institution(s) which facilitated the documentation/ evaluation of the Approach (if relevant)
HELVETAS (Swiss Intercooperation)

1.3 Conditions regarding the use of data documented through WOCAT

When were the data compiled (in the field)?

01/07/2012

The compiler and key resource person(s) accept the conditions regarding the use of data documented through WOCAT:

Ja

2. Description of the SLM Approach

2.1 Short description of the Approach

Providing lowland farmer cooperatives with self-managed, self-renewing financial resources for the purpose of facilitating members’ access to farming inputs.

2.2 Detailed description of the Approach

Detailed description of the Approach:

Once the infrastructure has been put in place, cooperatives are supported in drawing up their cropping plans (rice and vegetable growing). This support is provided in the context of value enhancement. The cropping plans include forecasting in relation to sites and the input needs of member farmers. The funds provided by the project are targeted towards supporting the empowerment of cooperatives and constitute non-repayable grants. Cooperatives use these financial resources to provide their members with loans to grow crops. When these crops are sold, the loans are repaid to the cooperatives along with a small percentage of interest to renew the loan facility. The loan awarding system, interest rates and repayment deadline are clearly defined by the cooperative. Women have access to gender-specific mechanisms, such as a facility to access credit without providing any personal contribution. The grant is awarded following a capacity-building process focusing on the management and governance of the cooperative. Following negotiations, the programme funds the cooperative’s cropping plan on the basis of a collaboration agreement. Support with managing the funds is delivered by a consultant. The grant is paid into the cooperative’s bank account. The cooperative organises the procurement of inputs, in collaboration with the service provider. Loans are provided in kind (seed, fertilisers, pesticides, etc.) rather than as cash. Those tasked with managing the cooperative are given training in how to use a range of management tools (drawing up cropping plans; keeping stock inventory, loan and repayment records; managing removal and delivery receipts; etc.). At the end of the growing season, the loans are repaid in kind (seed) and in cash (fertilisers and fungicides) in accordance with a predetermined timetable, thus replenishing the fund.
The structuring, organisational strengthening and management capacity building activities are delivered by the consultant from the outset of the scheme’s implementation phase. Groups of actors are encouraged to organise themselves as cooperatives (women and men rice growers, vegetable and other kinds of growers, etc.). These cooperatives, with the support of the consultancies, act as the representative for managing funds. They draw up their cropping plans (list of member producers and their farmland, and evaluation of the input requirements requested by producers) and define the system for awarding loans (the access conditions, repayment methods, timetables and interest levels are set by the cooperatives). An agreement setting out the ways in which the programme will provide support through a contracted service provider is signed. Funds are paid into the relevant bank account and the cooperative then procures the inputs. The cooperative managers, using the management tools at their disposal, distribute the inputs to producers. A public audit is organised to inform members about the status of loans. The recovery of loans with interest makes it possible to replenish the fund (with payments paid into the cooperative’s bank account). The public audit into the loan repayment situation is a medium for deploying coercive measures to recover unpaid loans.
The cooperatives catalogue needs, coordinate the preparation of the cropping plan, set the access conditions for loans, undertake procurement and ensure the recovery of loans from members. The communes participate in debriefings, facilitate the settlement of misunderstandings between producers and cooperatives, and monitor technical support provision. The intermunicipal body facilitates communication and negotiation between communes and the programme. Consultancies deliver management training and advisory support on technical aspects of farming, and facilitate the procurement of inputs suited to the farming condition of each site. Technical services participate in evaluation meetings and act as advisors to the service providers and programme team.

2.3 Photos of the Approach

2.5 Country/ region/ locations where the Approach has been applied

Country:

Mali

Region/ State/ Province:

Mali

Further specification of location:

Bougouni, Kolondiéba, Yanfolila

2.6 Dates of initiation and termination of the Approach

Indicate year of initiation:

2008

2.7 Type of Approach

  • project/ programme based

2.8 Main aims/ objectives of the Approach

Providing lowland farmer cooperatives with self-managed, self-renewing financial resources for the purpose of facilitating members’ access to farming inputs.
The SLM Approach addressed the following problems: lack of cash to invest in SLM

2.9 Conditions enabling or hindering implementation of the Technology/ Technologies applied under the Approach

availability/ access to financial resources and services
  • hindering

lack of cash to invest in SLM
Treatment through the SLM Approach: Providing lowland farmer cooperatives with self-managed, self-renewing financial resources for the purpose of facilitating members’ access to farming inputs.

3. Participation and roles of stakeholders involved

3.1 Stakeholders involved in the Approach and their roles

  • local land users/ local communities
  • SLM specialists/ agricultural advisers
  • NGO
  • local government
  • national government (planners, decision-makers)
3.2 Involvement of local land users/ local communities in the different phases of the Approach
Involvement of local land users/ local communities Specify who was involved and describe activities
initiation/ motivation passive
planning interactive
implementation interactive
monitoring/ evaluation interactive
Research passive

3.4 Decision-making on the selection of SLM Technology/ Technologies

Specify who decided on the selection of the Technology/ Technologies to be implemented:
  • mainly land users, supported by SLM specialists
Explain:

Decisions on the method of implementing the SLM Technology were made by mainly by land users supported by SLM specialists

4. Technical support, capacity building, and knowledge management

4.1 Capacity building/ training

Was training provided to land users/ other stakeholders?

Ja

Specify who was trained:
  • land users
  • field staff/ advisers
Form of training:
  • public meetings
  • courses
Subjects covered:

Consultancies deliver management training and advisory support on technical aspects of farming. Those tasked with managing the cooperative are given training in how to use a range of management tools (drawing up cropping plans; keeping stock inventory, loan and repayment records; managing removal and delivery receipts; etc.).

4.2 Advisory service

Do land users have access to an advisory service?

Ja

Specify whether advisory service is provided:
  • on land users' fields
Describe/ comments:

Name of method used for advisory service: Providing lowland farmer cooperatives with self-managed, self-renewing financial resources ; A local farming advisory mechanism active in the first few years of the scheme ensures high levels of productivity, which, in turn, facilitates the repayment of loans. Holding public audits to report on accounts ensures that the system is transparent.

Advisory service is quite adequate to ensure the continuation of land conservation activities

4.3 Institution strengthening (organizational development)

Have institutions been established or strengthened through the Approach?
  • yes, moderately
Specify the level(s) at which institutions have been strengthened or established:
  • local
Specify type of support:
  • financial
  • capacity building/ training

4.4 Monitoring and evaluation

Is monitoring and evaluation part of the Approach?

Ja

Comments:

socio-cultural aspects were ad hoc monitored by project staff through observations
economic / production aspects were ad hoc monitored by project staff, land users through measurements
management of Approach aspects were ad hoc monitored by project staff, land users through observations
There were no changes in the Approach as a result of monitoring and evaluation: None
There were no changes in the Technology as a result of monitoring and evaluation: None

4.5 Research

Was research part of the Approach?

Ja

Specify topics:
  • sociology
  • economics / marketing
  • ecology
  • technology

5. Financing and external material support

5.1 Annual budget for the SLM component of the Approach

Comments (e.g. main sources of funding/ major donors):

Approach costs were met by the following donors: international non-government: 100.0%

5.2 Financial/ material support provided to land users

Did land users receive financial/ material support for implementing the Technology/ Technologies?

Ja

If yes, specify type(s) of support, conditions, and provider(s):

The funds provided by the project are targeted towards supporting the empowerment of cooperatives and constitute non-repayable grants. Cooperatives use these financial resources to provide their members with loans to grow crops. When these crops are sold, the loans are repaid to the cooperatives along with a small percentage of interest to renew the loan facility. The loan awarding system, interest rates and repayment deadline are clearly defined by the cooperative. Women have access to gender-specific mechanisms, such as a facility to access credit without providing any personal contribution.

5.3 Subsidies for specific inputs (including labour)

If labour by land users was a substantial input, was it:
  • rewarded with other material support
Comments:

Loans are provided in kind (seed, fertilisers, pesticides, etc.) rather than as cash.

5.4 Credit

Was credit provided under the Approach for SLM activities?

Ja

Specify conditions (interest rate, payback, etc.):

repayment conditions: The funds provided by the project are used to buy inputs on the basis of the cropping plan. The start-up fund granted by the programme pays for the initial stock. Once this stock has been procured, the inputs are distributed to members according to their stated requirements. The repayment schedule and the amount of interest that must be paid are communicated. Growers’ production activities are supported and monitored by the consultant and the management committee. Following the harvesting and sale of crops, in accordance with the deadline set, the loans are recovered along with their interest payments and the fund is replenished for the following growing season. During the different implementation stages, the cooperative holds public audits in the presence of the commune authorities to report on how the cooperative is being managed; the aim being to build trust between the cooperative and its members.

6. Impact analysis and concluding statements

6.1 Impacts of the Approach

Did the Approach help land users to implement and maintain SLM Technologies?
  • No
  • Yes, little
  • Yes, moderately
  • Yes, greatly

A local farming advisory mechanism active in the first few years of the scheme ensures high levels of productivity

Did the Approach empower socially and economically disadvantaged groups?
  • No
  • Yes, little
  • Yes, moderately
  • Yes, greatly
Did other land users / projects adopt the Approach?
  • No
  • Yes, little
  • Yes, moderately
  • Yes, greatly

The system has been applied in 19 sites across 15 communes in the circles of Bougouni, Kolondiéba and Yanfolila. In total, 2,150 producers – 81% of the farmers identified in the production areas – have benefited from the loan scheme. The approach has been in use since 2008.

Did the Approach lead to improved livelihoods / human well-being?
  • No
  • Yes, little
  • Yes, moderately
  • Yes, greatly

Groups of actors are encouraged to organise themselves as cooperatives (women and men rice growers, vegetable and other kinds of growers, etc.). In total, 2,150 producers – 81% of the farmers identified in the production areas – have benefited from the loan scheme.

Did the Approach help to alleviate poverty?
  • No
  • Yes, little
  • Yes, moderately
  • Yes, greatly

70% of the beneficiaries have improved their production levels. This management experience enables farmers to operate as entrepreneurs and to accurately assess their profitability

6.2 Main motivation of land users to implement SLM

  • increased production
  • payments/ subsidies

6.3 Sustainability of Approach activities

Can the land users sustain what has been implemented through the Approach (without external support)?
  • yes

6.4 Strengths/ advantages of the Approach

Strengths/ advantages/ opportunities in the compiler’s or other key resource person’s view
Cooperatives are empowered to manage the funds. (How to sustain/ enhance this strength: It must be clearly communicated that the funds belong to the cooperative and are only granted once. The granting of in-kind (inputs) rather than cash loans curbs any attempts to stray from the objectives. )
Since the programme began in 2008, the cooperatives have managed to achieve recovery rates of between 80% and 100%, and, with the system in place, 70% of the beneficiaries have improved their production levels. This management experience enables farmers to operate as entrepreneurs and to accurately assess their profitability. (How to sustain/ enhance this strength: Institutional and organisational strengthening plays a key role in achieving a successful outcome. )
Following the granting of an initial ‘seed fund’, the financing mechanism grows and becomes sustainable on its own.
Evaluation meetings bring together actors from all the sites (commune authorities, cooperatives), consultancies and the programme team, serving to motivate actors and offering the opportunity to share experiences.
A local farming advisory mechanism active in the first few years of the scheme ensures high levels of productivity, which, in turn, facilitates the repayment of loans. Holding public audits to report on accounts ensures that the system is transparent.

7. References and links

7.1 Methods/ sources of information

  • field visits, field surveys
  • interviews with land users

7.2 References to available publications

Title, author, year, ISBN:

Manual of Good Practices in Small Scale Irrigation in the Sahel. Experiences from Mali. Published by GIZ in 2014.

Available from where? Costs?

http://star-www.giz.de/starweb/giz/pub/servlet.starweb

Title, author, year, ISBN:

2011 report: Accompagnement à la valorisation des ouvrages hydro-agricoles sur les sites de Blakala, Ména, Bafaga, Mamissa, Bogodougou, Nèrèkoro, Koloni et Mogoyafara [Support to enhance the value of hydro-agricultural schemes in Blakala, Ména, Bafaga, Mamissa, Bogodougou, Nèrèkoro, Koloni and Mogoyafara] (GSAD – Sahelian Development Support Group)

Title, author, year, ISBN:

2011 report: Accompagnement à la valorisation des ouvrages hydro-agricoles sur les sites de Niakobougou, Blendougou, N’Gala, Banko, Faradiélé, Sibirila, Solona, Farababougou [Support to enhance the value of hydro-agricultural schemes in Niakobougou, Blendougou, N’Gala, Banko, Faradiélé, Sibirila, Solona and Farababougou] (BEACIL – Consultancy and Advisory Support for Local Initiatives)

Title, author, year, ISBN:

2013 report: Collecte de données sur la valorisation des ouvrages hydro-agricoles réalisés dans le Pôle de Bougouni sur le financement

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