Farmers grow with the help of individual credit

Individual credit provides farmers with additional growth opportunities

“We coached the Ethiopian organisation Wasasa in developing a microcredit scheme for farmers.”

KBC employee Jan Leyten’s job is about much more than figures and analyses. When supporting local KBC branches in handling agricultural and horticultural cases, in his capacity as an agricultural economist, he does so with a great affinity with the farm. As the grandson of a farmer and the son of a bioengineer, agriculture is part of his DNA. And close to his heart!


The oldest occupation in the world

“Agriculture is the foundation of everything. That’s why I’m so excited by it. Farmers provide primary food production, making it the oldest occupation in the world. When BRS asked me to be a volunteer and support Wasasa, a microfinancing institution in Ethiopia that focuses on farmers, I agreed immediately.”

At the farmers’ request

“I went to Addis Ababa for a week in 2017, together with Paul Vanschoonlandt, my colleague at KBC for many years. The purpose of our mission was to support the development of individual credits to farmers.

Wasasa has almost 20 years of experience in providing group credits. It is one of the leading organisations of its kind in Africa. Now, it also wants to meet the demand of its farmers for individual credits, which offer them additional growth opportunities. But this aim is not straightforward because Wasasa works with poor farmers who cannot provide any material guarantees. That’s why the microfinancing institution started a pilot project some time ago.”

A big step forward

“When we arrived in July, there were ten or so individual credits of 8,800 birr (270 euros) per hectare. This money may only be used for agricultural activities. It is up to Paul and myself, together with Wasasa and the farmers, to evaluate the first steps in this project and make adjustments where necessary.

Discussions with farmers soon revealed that the individual microcredits greatly improve their lives. It allows them to buy good quality seeds and fertilisers. This increases the yield of their crops along with their income. One of the farmers told me that he can now send his children to school, and his eldest even to university. And that is thanks to the extra income provided by this individual credit.”

Not too much, not too little

“Correct financing is very important for individual loans. If you lend the farmers too much, you saddle them with a lot of debt. If you lend them too little, they can’t work profitably. Just like the banks here, microfinancing institutions have a great responsibility in this regard.

To help Wasasa’s credit decision-makers correctly estimate the amount of credit that farmers can comfortably bear, Paul and I are now working on a tool that combines as much data as possible. With this detailed overview of the surface area worked, types of cultivation, materials used, purchase and sales prices, etc., employees obtain an insight into reimbursement capabilities and can take responsible decisions.”

The crux of the matter

“It was the first time I had talked to African farmers. It struck me that they have the same concerns and the same dreams as us: they want to improve their lives and build a better future for their children.

The fact that you can help them achieve this with a relatively small degree of effort motivates me to support this project. And I hope that Wasasa can quickly expand the pilot project, because it really helps farmers move forward. After all, that’s what it’s all about: banks supporting customers and giving them a better life.”