Specialized savings products help farmers to manage their cash flow. Malawian farmers who were offered savings accounts and special commitment savings products saved more and invested more in agricultural inputs. Compared with farmers not offered the accounts, their crop outputs in the next year’s harvest were 22% higher, post-harvest household expenditures 17% higher, and food consumption 10-25% higher.
Warehouse receipt systems in Uganda and Tanzania allow smallholder famers to store their crops in special warehouses, whose managers sell at the most advantageous prices. Some systems also enable famers to take loans or credit against the value of the crop before actual sale. By 2013, more than 500,000 African small farmers will have increased their production and earnings through such systems supported by the United Nations World Food Programme’s Purchase for Progress (P4P) initiative. Other warehouse financing programs are also helping to address the agricultural financing gap.
- Microinsurance Innovation Facility website, “Emerging Insights #42.”
- Lasse Brune, Xavier Giné, Jessica Goldberg, Dean Yang. "Commitments to save: a field experiment in rural Malawi,” (2010).
- Jake Kendall. “Giving Farmers in Malawi a Better Way to Save Their Harvest Proceeds,” (2010).
- GFDDR, “Weather Index-based Crop Insurance in Malawi,” (2011)