SFS objective is to help investments for improved farm practices at an individual level. Support will be provided through training, both on climate smart agriculture and for APG formation and strengthening. In order to further incentivize farmers and APGs to adopt new technologies, finance will be provided by the project (at rates determined by the APGs which will be better than financial institutions, including MFIs, which currently have few clients in the agricultural sector) through a smallholder financing scheme (SFS), with an emphasis on technology and equipment which helps farmers to undertake CSA, grow higher quality crops and add value, and cope with the impacts of climate change and reduce greenhouse gas emissions.
The SFS funds will be disbursed to APGs who in turn will disburse money to groups of members on a revolving fund basis. As part of the eligibility criteria, APGs will be expected to provide 10% of the investment cost as seed funding.
To improve project efficiency, the SFS will be combined with the MGS as a separate funding ‘Window’ of the MGS. The budget for the SFS is $1.39 million based on a grant of approximately $25,000 for 50 APGs. APGs will be eligible to apply both for the MGS (vegetable pack houses) and the SFS.