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Market Facilitation Initiative (MAFI) Image

MaFI (The Market Facilitation Initiative)

Market Facilitation Clinic 1: Case Study

 Scaling Up Financial Products in Market Systems: Beyond the Usual Suspects

Market Facilitation Clinic 1: Case Study

SEEP BEAM Exchange

Developing a Learning Agenda
 Initial Participant Challenges
Participant Case Studies Expert Voice

 This group used systems thinking to identify and support a range of market actors to  design and scale financial products that meet the unique constraints of rural farmers/poor. Some group members are working directly with financial institutions to refine their product offerings. In other cases, members may be supporting a different market actor to build a custom financing model to help the poor access key products or services, from organic fertilizer to solar-powered irrigation pumps. The group tackled the challenge of getting market actors to move from perceived risk to real risk for different investments, and to structure financial products that match the cash flow realities of the poor.

Developing a Learning Agenda

In the first group call, the group got to know one another, and upon hearing about their individual contexts (and with some framing provided by the facilitator), they converged around the question they wanted to address together through this group.


Learning Agenda:

How do we leverage a wider set of partners within the market system to  move from pilot to scale in financial products/services? How do we identify the right incentives, both from supply and demand sides, to increase access to products that are appropriate for the rural poor?


Given this shared learning agenda, each of the group members then prepared and share with the rest of the group a "live case study." Fellow group members were given the opportunity to ask clarifying questions and make suggestions on possible strategies their colleague might test out. The cases are described in the sections that follow.

Participant 1: Gustavo Cavero

Economic Development Manager
World Vision (Myanmar)

Gustavo's Challenge:

  • Rice farmers need cash immediately after harvesting, so they are forced to sell their produce quickly, at times when prices are at their lowest.
  • Loans from MFIs could help them wait until prices increase, but MFIs do not exist in all areas - so how to develop financial products in the absence of MFIs?
  • Should the team work with village Community Based Organizations? Should they get a better negotiation strategy with other actors in the value chain?
  • In places where MFI’s exist, they are planning to test a Warehouse Receipt System between local communities, traders, warehouses and MFI that allows farmers to store crops to sell at high price while also accessing loans to have cash flow at harvest time.

Sample Group Questions for Gustavo:

  • What exactly is a warehouse receipt system? How does it work?
  • Who would manage the operations of the warehouse itself? Where would you find them?
  • Are there existing informal interactions in the market system that you could leverage in creating this large behaviour change?

Gustavo's Key Insights:

  • Look to large input retailers or buyers who might be providing informal credit already to farmers to understand what is driving that.
  • Seek out mobile money providers who might be offering relevant products, to learn about new financial services in Myanmar that might be relevant.
  • Develop contract agriculture with actors further down the value chain negotiating better prices.

 Decisions, Actions, and Follow-Up:

  • We will be testing a co-financing scheme including financial contributions from farmers, value chain actors, investors and potentially MFIs in areas where there are no MFIs to fund small producers organizations to improve their productive conditions hence their income.
  • Where MFIs are present, will be piloting the Warehouse Receipt System.
Participant 2: Omar Faruq

Managing Director
Faruq Fertilizers Ltd. (Bangladesh)

Omar's Challenge:

  • At the end of a 1 year pilot expanding outreach to farmers regarding the benefits of organic fertilizer (farmer trainings, 1-on-1 support, demonstration plots, trying to decide how to move forward with next year.
  • How to scale it up? Increasing geographical scope, and therefore hiring more field facilitators? Or to try and better reach existing farmers given that only 10% have actually adopted the organic fertilizer after year 1?

Sample Group Questions for Omar:

  • What distinguished the farmers who adopted the new practices from those who did not?
  • What is your relationship with NGOs and other input dealers who also supply inputs?
  • What are your annual sales and number of farmers reached?
  • What are the selection criteria for your field facilitators - technical or business knowledge?

Omar's Key Insights:

  • Think differently about the background of field facilitators - beyond agricultural knowledge to see business/marketing as helpful.

  • Think about the role that MFIs and other financing models could play in supporting farmers outside of current work.

 Decisions, Actions, and Follow-Up:

  • “Instead of increasing geographical area for scaling up, revisit same farmers who were made aware of benefits and trained on using ChookChook nutrient enriched organic fertilizers. This will give quick revenue and will make the project sustainable. At the same time there should be at least 25-30% new farmers to be outreached.
  • Field Facilitators coming from general education may perform better than those come from agriculture science.
  • Appointment of FFs at the same time rather than spreading over a period.”
Participant 3: Heather Lemunyon

Senior Technical Coordinator
ACDI/VOCA (United States)

Heather's Challenge:

  • ACDI-VOCA’s in-country investment funds are introducing a new financial product to agricultural SME’s that have not seen anything like it: Demand-dividend model, where the payback for a loan is tied to revenues rather than a pre-defined interest rate and payback period. (e.g. principal of $100k, amount to be paid back is pre-defined at $200k, but with no timeframe - only that 5% of revenue gets out to the investor until the $200k is fully paid off. Hence ‘equity-like’ but actually just debt structured in a different way)
  • Challenges with prospective investees: (1) Payback can be quite long, (2) People have nothing to compare it to (new product), (3) How to explain in a concise way?
  • Interested in figuring out how to communicate it, how to operationalize it, and ultimately how to scale it up.

Sample Group Questions for Heather:

  • What is the market need this product would satisfy?
  • Are you doing this directly, or implementing through local actors?
  • How do you want to scale (corner the market, or be emulated/copied by other investors?)?

Heather's Key Insights:

  • Already looking into legislation and market needs on the ground.
  • Thinking about who are the early adopters, and who might copy this (scaling of the product).

 Decisions, Actions, and Follow-Up:

  • “I've made note of 1-2 changes I'd like to make per our calls, but the time to make those changes in my work has not come yet.”
Participant 4: Sarah Nuernberger

Project Manager
International Development Enterprises (iDE) (United States) 

Sarah's Challenge:

  • How to make a solar-powered pump (for irrigation) affordable and competitive with diesel powered pumps that have lower capital cost but much higher operating costs, in contexts where the diesel pumps are the norm and the solar pump is unfamiliar?
  • IDE has developed the technology and is looking at different financing models to roll it out in two countries: Zambia and Nepal.
  • Broad question: What sorts of financing options are available that bring it down and make it more competitive and appealing to a farmer?
  • How to leverage data-logging technology to potentially develop a pay-as-you-go modules for the pump. Can put a sim card in the monitoring device that then acts like a utility (pay for flow rate, usage, etc.).

Sample Group Questions for Sarah:

  • Technical questions - pump capacity, scope for battery? Connection between irrigation, pump and reservoir?
  • Which crops are farmers growing on what size of plots?
  • How could you use relationships to farmers groups, etc. to start with a high-trust customer base?
  • Who in the market system has the capacity and incentive to invest in farmer vegetable production?

Sarah's Key Insights:

  • How can we use (system-wide) subsidies to bring in the pump without distorting the market?
  • There are alternatives to MFI when it comes to appropriate finance, especially in a pay-as-you-go model, but the implementation is still a big challenge.
  • Getting farmers to trust the product first is key (from Gustavo’s experience with cookstoves).

 Decisions, Actions, and Follow-Up:

  • How to get to a proof-of-concept to bring a bigger actor on board?
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