Duration: 2 years
Funding: Ministry of Foreign Affairs of the Netherlands and the International Development Research Centre (Canada)
Project partners: RUAF partners ETC, MDP, IPES, ABU-ESDU, IMWI and IAGU; Zimbabwe Open University, Zimbabwe; University of Ghana; University of Ndola, Zambia; Ministry of Agriculture, Forestry and Fisheries, Sierra Leone; Centro de Autodesenvolvimiento do Brasil; Universidad de Rosario, Colombia; Wyamba University Sri Lanka; PRISMA, Peru; YASAD, Yemen; PROFAUP, Porto Novo; University of Ibadan, Nigeria
- In 14 cities (Bulawayo, Bobo Dioulasso, Accra, Ndola, Freetown, Belo Horizonte, Cape Town, Bogota, Sana’a, Amman, Gampaha, Porto Novo and Ibadan) the following three key issues were examined:
- How public and private institutions finance actually finance urban agriculture.
- Needs and demands for finance from urban poor engaged in urban agriculture, agro-processing or -marketing. A central objective was to understand how and through which mechanisms these urban farmers all along the value chains are financing and expanding their activities.
- Ways to bridge the gap between existing and potential financial resources (the supply side) and the needs and demands of small-scale urban farmers (the demand side).
- To that effect the following activities were implemented:
- an inventory of all formal and informal sources of credit and financing available in the city followed by interviews with representatives of the institutions, organisations and money lenders to gather information about their financing activities regarding small scale urban agriculture, related conditions and procedures and their views on actual obstacles and opportunities for improving access to financing for small scale urban producers and agro-enterprises;
- focus group discussions with different types of small scale urban producers and agro-enterprises to get information about their actual sources of credit and financing for urban agriculture activities (production, processing, transport and marketing) and related conditions as well as their perception of the actual credit and finance services offered by various institutions, organisations and private persons.
- Subsequently, the financial institutions in the 14 cities were informed – in writing and during a local workshop- about the results of the study in their city and invited to get involved in financing small scale urban agriculture and/or to improve their financing conditions and procedures to enhance access of small scale urban producers and agro-enterprises.
- The most interested local financing institutions and organisations in the 14 cities were supported in the design of innovative pilot financing schemes for small urban producers and/or agro-enterprises.
- Fourteen city reports were produced as well as several synthesis papers and articles.
- The studies provide insight in the actual constraints and limitations in access to finance for small scale urban producers and agro-enterprises.
- The studies also revealed a large variety of local innovations in credit and finance practices for urban agriculture, including existing local initiatives as well as innovations resulting from the design of innovative pilot financing schemes undertaken by the local organisations with support of the RUAF partners.
- As a practical results of the latter, in 14 cities 23 institutions connected to urban farmer groups in their city to jointly design credit and financing schemes; In addition 11 institutions modified their loan and financing conditions to enhance access to financing for small scale producers and agro-enterprises (accepting group loans; lowering collateral requirements and interest rates) while 14 institutions increased their level of annual financing for urban agriculture. These include banks and micro-finance organisations that are now providing loans to urban farmers through collective applications (e.g., in Lima) or with more favourable loan conditions (Amman); national governments that are now recognising urban producers as beneficiaries of agricultural support schemes (like in India, Zambia and Zimbabwe); local governments that are providing farmers with temporary user rights that can serve as collateral for obtaining a loan (Freetown); and private enterprises (co-)funding urban agriculture projects out of their corporate social responsibility (Ndola) or supporting contract farming (Bulawayo).
- Financing Urban Agriculture - lessons learned (article)
- Synthesis report on Financing Urban Agriculture
Study reports on local finance for Urban Agriculture are available for the following cities:
- Accra, Ghana (English)
- Ndola, Zambia (English)
- Belo horizonte, Brazil (Portuguese)
- Cape Town, South Africa (English)
- Bogota Colombia (Spanish)
- Sanaa, Yemen (English)
- Bulawayo, Zimbabwe (English)
- Lima Peru (Spanish)
- Ibadan, Nigeria (English)
- Bobo Dioulasso, Burkina Faso (French)
- Freetown, Sierra Leone (English)
- Amman, Jordan (English)
- Gampaha, sri Lanka (English)