Green credits and savings and loan groups
In a world where 1.4 billion people live without access to a bank account, we face a serious challenge.
Economic progress for small-scale farmers in the Global South
Despite 76% of the world’s adult population now having access to banking services, there remains a large number of people, especially in countries of the Global South, who live outside the formal financial system. This issue affects not only an individual’s ability to save and invest but also their capability to manage unforeseen financial situations.
The importance of access to credit
The lack of access to savings schemes and credit makes it difficult for individuals to invest in income-generating activities or cover basic needs in times of economic uncertainty. Poor and marginalised groups, including women, youth, and persons with disabilities, are especially vulnerable. For many, the only available source of loans comes with high interest rates and poor conditions, which can lead to a debt spiral that is difficult to escape from.
Sustainable solutions with green credits
The Development Fund’s initiative with green credits offers an innovative solution to this problem. By committing to environmental actions such as soil conservation, planting fruit trees, or building dams, farmers gain access to loans with lower interest rates than those offered by traditional banks. This initiative not only promotes economic development but also contributes to environmental protection.
The loans awarded through this program can be used to purchase seeds, tools, or for livestock. Repayment occurs after the harvest, enabling small farmers to invest in their production without incurring insurmountable debt.
Savings and loan groups strengthen communities
Another important component in the work for economic inclusion is the creation of savings and loan groups. These groups act as microfinance institutions where members themselves handle deposits and loans. This gives members access to credit for investments in their own production or the startup of businesses. Over time, this contributes to increased economic resilience in the community.
The benefits of these groups extend beyond the financial gain. They provide increased knowledge, confidence, and a sense of community among members. Through annual withdrawal opportunities, where members receive their deposits back, flexibility is combined with financial security.
Training and knowledge sharing
To ensure the success of these programs, The Development Fund and its partners offer training in financial management, drafting of statutes, and conducting meetings and savings and loan routines. This ensures that the groups are run efficiently and democratically, and that members feel ownership of the process.
Despite the challenges being vast, initiatives like green credits and savings and loan groups show that there is hope. By combining financial support with training and self-governance, we can create a more inclusive economy that benefits everyone.
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Green Credits and Savings and Loan Groups
Learn more about The Development Fund's work with green credits and savings and loan groups.