IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v11y2019i15p4062-d252345.html
   My bibliography  Save this article

The Alfredo Namitete Agroecology Credit System: A New Business Model That Supports Small-Scale Lending

Author

Listed:
  • Angela Hilmi

    (Centre for Agroecology, Water and Resilience, Coventry University, Ryton Gardens, Wolston Lane, Coventry, Warwickshire CV8 3LG, UK)

Abstract

A major obstruction in the development of sustainable agriculture is the weakness of the financial and banking sectors in supporting smallholder farming. While farmers need to invest in their farms, they struggle to find credit schemes adapted to their specific needs. This study explores the literature on a range of credit systems applied in different geographical and historical contexts to analyse the underlying drivers of their successes or otherwise. In light of this review, the study investigates a farmers’ association, Alfredo Namitete (AN), in Mozambique, offering a range of agroecology credit modalities. It is then assessed as to whether a new business model initiated with seed funding could be self-managed by the association itself and lead to greater autonomy. The AN pilot tested three schemes between 2015 and 2019. Based on the findings, i.e., better production, increased revenue and greater self-determination, the study combines elements for a new business model for small-scale lending. It concludes that to be effective, a credit scheme needs to meet several conditions simultaneously: believe in the genuine will to repay, abolish the lender–borrower distance, ensure a role for women in decision making, add a savings mechanism, combine individual and collective investments and, finally, reserve funds for solidarity and climate issues.

Suggested Citation

  • Angela Hilmi, 2019. "The Alfredo Namitete Agroecology Credit System: A New Business Model That Supports Small-Scale Lending," Sustainability, MDPI, vol. 11(15), pages 1-20, July.
  • Handle: RePEc:gam:jsusta:v:11:y:2019:i:15:p:4062-:d:252345
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/11/15/4062/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/2071-1050/11/15/4062/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Carolina Laureti, 2018. "Why Do Poor People Co-Hold Debt and Liquid Savings?," Journal of Development Studies, Taylor & Francis Journals, vol. 54(2), pages 213-234, February.
    2. Angela Hilmi, 2018. "Peasant Farming as a Source of Life," Development, Palgrave Macmillan;Society for International Deveopment, vol. 61(1), pages 122-128, December.
    3. Benjamin Musah Abu & Issahaku Haruna, 2017. "Financial inclusion and agricultural commercialization in Ghana: an empirical investigation," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 77(4), pages 524-544, November.
    4. Carolina Laureti, 2017. "Why do Poor People Co-hold Debt and Liquid Savings?," Working Papers CEB 17-007, ULB -- Universite Libre de Bruxelles.
    5. Xiangping Jia & Hao Luan & Jikun Huang & Zuowen Li, 2015. "A Comparative Analysis of the Use of Microfinance and Formal and Informal Credit by Farmers in Less Developed Areas of Rural China," Development Policy Review, Overseas Development Institute, vol. 33(2), pages 245-263, March.
    6. Yuan, Yan & Xu, Lihe, 2015. "Are poor able to access the informal credit market? Evidence from rural households in China," China Economic Review, Elsevier, vol. 33(C), pages 232-246.
    7. Sarah K Lowder & Brian Carisma & Jakob Skoet, 2015. "Who Invests How Much in Agriculture in Low- and Middle-Income Countries? An Empirical Review," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 27(3), pages 371-390, July.
    8. Angela Hilmi & Sara Burbi, 2016. "Peasant Farming, a Refuge in Times of Crises," Development, Palgrave Macmillan;Society for International Deveopment, vol. 59(3), pages 229-236, December.
    9. Sonia Afrin & Mohammed Ziaul Haider & Md. Sariful Islam, 2017. "Impact of financial inclusion on technical efficiency of paddy farmers in Bangladesh," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 77(4), pages 484-505, November.
    10. Nguyen, Trung Thanh & Nguyen, Loc Duc & Lippe, Rattiya Suddeephong & Grote, Ulrike, 2017. "Determinants of Farmers’ Land Use Decision-Making: Comparative Evidence From Thailand and Vietnam," World Development, Elsevier, vol. 89(C), pages 199-213.
    11. Marguerite S. Robinson, 2002. "The Microfinance Revolution : Volume 2. Lessons from Indonesia," World Bank Publications - Books, The World Bank Group, number 14254.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Eric C. Davis & Ani L. Katchova, 2020. "The Impact of Bank Deregulations on Farm Financial Stress and Stability," Sustainability, MDPI, vol. 12(4), pages 1-14, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jiang Du & Miao Zeng & Zhengjuan Xie & Shikun Wang, 2019. "Power of Agricultural Credit in Farmland Abandonment: Evidence from Rural China," Land, MDPI, vol. 8(12), pages 1-14, December.
    2. Wooyoung Lim & Sujata Visaria, 2020. "The Borrowing Puzzle: Why Do Filipino Domestic Workers in Hong Kong, China Borrow Rather than Dissave?," Asian Development Review, MIT Press, vol. 37(2), pages 77-99, September.
    3. Anastasia Cozarenco & Valentina Hartarska & Ariane Szafarz, 2019. "Too Many Cooks Spoil the Broth: The Conflicting Impacts of Subsidies and Deposits on the Cost-Efficiency of Microfinance Institutions," Working Papers CEB 19-001, ULB -- Universite Libre de Bruxelles.
    4. Do, Manh Hung & Nguyen, Trung Thanh & Grote, Ulrike, 2023. "Land consolidation, rice production, and agricultural transformation: Evidence from household panel data for Vietnam," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 157-173.
    5. David Hulme & Karen Moore & Armando Barrientos, 2009. "Assessing the insurance role of microsavings," Working Papers 83, United Nations, Department of Economics and Social Affairs.
    6. Kieran Donaghue, 2004. "Microfinance in the Asia Pacific," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 18(1), pages 41-61, May.
    7. Wonhyung Lee & Nurul Widyaningrum, 2019. "Multidimensional access to financial services: Insights from Indonesia," Progress in Development Studies, , vol. 19(1), pages 21-35, January.
    8. Laureti, Carolina & Szafarz, Ariane, 2023. "Banking regulation and costless commitment contracts for time-inconsistent agents," Economic Modelling, Elsevier, vol. 129(C).
    9. Hong Sun & Valentina Hartarska & Lezhu Zhang & Denis Nadolnyak, 2018. "The Influence of Social Capital on Farm Household’s Borrowing Behavior in Rural China," Sustainability, MDPI, vol. 10(12), pages 1-20, November.
    10. Dang, Le Phuong Xuan & Hoang, Viet-Ngu & Nghiem, Son Hong & Wilson, Clevo, 2023. "Social networks with organisational resource, generalised trust and informal loans: Evidence from rural Vietnam," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 388-402.
    11. Cull,Robert J. & Gan,Li & Gao,Nan & Xu,L. Colin & Cull,Robert J. & Gan,Li & Gao,Nan & Xu,L. Colin, 2015. "Dual credit markets and household access to finance : evidence from a representative Chinese household survey," Policy Research Working Paper Series 7454, The World Bank.
    12. Fu, Zhenqi & Tao, Yunqing, 2022. "Land disasters and farmers’ private credit," Finance Research Letters, Elsevier, vol. 47(PB).
    13. Nguyen, Trung Thanh & Nghiem, Nhung, 2016. "Optimal forest rotation for carbon sequestration and biodiversity conservation by farm income levels," Forest Policy and Economics, Elsevier, vol. 73(C), pages 185-194.
    14. D. T. Kingsley Bernard & Low Lock Teng Kevin & Aye Aye Khin, 2016. "Entrepreneurial Success through Microfinance Services among Women Entrepreneurs in Sri Lanka: A Pilot Study and Overview of the Findings," International Journal of Economics and Financial Issues, Econjournals, vol. 6(3), pages 1144-1150.
    15. Syaikhu Usman & Widjajanti Isdijoso & Bambang Sulaksono & Nina Toyamah & M. Sulton Mawardi & Akhmadi, "undated". "Lessons Learned from Microfinance Services in East Nusa Tenggara," Working Papers 507, Publications Department.
    16. Ana María Iregui-Bohórquez & Ligia Alba Melo-Becerra & María Teresa Ramírez-Giraldo & Ana María Tribín-Uribe, 2018. "Crédito formal e informal de los hogares en Colombia," Investigación Conjunta-Joint Research, in: María José Roa García & Diana Mejía (ed.), Decisiones financieras de los hogares e inclusión financiera: evidencia para América Latina y el Caribe, edition 1, volume 1, chapter 5, pages 133-166, Centro de Estudios Monetarios Latinoamericanos, CEMLA.
    17. Miki HAMADA, 2010. "Commercialization Of Microfinance In Indonesia: The Shortage Of Funds And The Linkage Program," The Developing Economies, Institute of Developing Economies, vol. 48(1), pages 156-176, March.
    18. Abbas Ali Chandio & Yuansheng Jiang & Abdul Rauf & Fayyaz Ahmad & Waqas Amin & Khurram Shehzad, 2020. "Assessment of Formal Credit and Climate Change Impact on Agricultural Production in Pakistan: A Time Series ARDL Modeling Approach," Sustainability, MDPI, vol. 12(13), pages 1-21, June.
    19. Mai, Nhat Chi, 2022. "Socioeconomic effects of collectivist and individualist education: A comparison between North and South Vietnam," OSF Preprints n9pyw, Center for Open Science.
    20. Wachenheim, Cheryl & Fan, Linfeng & Zheng, Shi, 2021. "Adoption of unmanned aerial vehicles for pesticide application: Role of social network, resource endowment, and perceptions," Technology in Society, Elsevier, vol. 64(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:11:y:2019:i:15:p:4062-:d:252345. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.