What Can Microfinance Contribute to Agriculture in Developing Countries?

This paper presents details of a conference that explored conditions under which microfinance could help farmers in developing countries access credit to improve their competitiveness. The conference, which brought together 350 participants committed to agricultural finance, discussed:

• Inadequacy of supply of finance to agriculture;
• Microfinance's limited contribution to agricultural finance;
• New forms of partnership;
• Importance of peasant organizations;
• Renewal of public policy incentives.

Conference participants concluded that microfinance can play an important role in agricultural finance and is capable of mitigating the many challenges associated with the sector. This would need:

• Agricultural sector organization;
• Professionalization of various actors;
• Supply of diversified and well-adapted financial services;
• Access to non-financial services that promote agricultural development;
• MFI access to medium and long term affordable refinancing;
• Diversification of regions and types of activities financed;
• Regulatory framework adapted to the challenges of agricultural and rural finance.