Through its Lifelong Learning for Farmers (L3F) Programme, COL is supporting the development of innovative credit-guarantee models as a means to achieve enhanced social and economic outcomes and promote the transition from meso- to macro-scale sustainable development.

A recent workshop organised jointly with Matumaini Mapya NGO for the staff of the Bank of Tanzania, Mkombozi Commercial Bank and the Ministry of Agriculture in Dar es Salaam increased understanding of the opportunities for using cognitive social capital as collateral along with the strategies and policies necessary to promote producer finance companies. Dr K. Balasubramanian, served as the lead workshop facilitator.

According to workshop participants, farmers and the rural poor are yet to fully overcome the challenge of accessing financial loans because of risks associated with limited capacity and sub-optimal use of cognitive social capital. They reiterated the importance of building the capacity of banking staff and senior officials in the use of social collateral as security for agricultural micro-financing through the umbrella organisation, Tanzania Banking Association. Workshop attendees also welcomed the idea of forming a single Producers Financial Company that would approach banks for credit on behalf of farmers/producers.

Dr Moses Tenywa, Education Specialist: Agriculture and Livelihoods, noted: “COL’s support in strengthening government and umbrella organisations to empower community-based financial institutions to increase access to rural credit by farmers through financial institutional innovations such as social collateral for security is in line with its strategic direction.”