Tanzania already has tools that reduce the risk of lending to agriculture: guarantee schemes, value chain and group lending, warehouse receipts and savings groups. Each was built for one part of the problem and works on its own terms.
The trouble begins when a lender has to use them together on one loan. Before deciding, the officer needs four answers: is the group sound, will a buyer take the crop, is cover in place, does a guarantee apply. Each answer sits with a different party, and without a place where they can be seen together the tools are hard to use on the loan in front of the officer.
What we are building
None of this is live yet. It is in design and early build:
- ●The back-end infrastructure that lets the existing de-risking tools be used together on one case
- ●Evidence for every link, so each party sees what the others rely on
- ●The same mind beside the farmer, the buyer, the insurer and the guarantor, each in their own language and on their own terms
Where the product stands
Today LitFin Intelligence appraises agricultural credit files beside a lender's own officers, in Tanzania. Connecting the tools is the work ahead, and the decision on each loan stays with a person.