Mozambique farmers enjoying greater food security, higher incomes

“I will not go to the bank again for the old loan. The new loan is much better because it allows me to pay back after I have sold my crop.”

In rural Mozambique, more than 75% of the population earns less than $2 a day, and 78% of households do not always have enough to eat. Like small farmers all over the world, farmers in Maputo province are trapped in a cycle of low investment/low returns that leads to high rates of poverty and food insecurity.

But farmers are beginning to increase their incomes and enjoy improved food security as the result of a recent MEDA project. Working with local microfinance institution (MFI) Male Yeru, MEDA has helped farmers start to break the cycle of poverty through access to capital with a new loan product tailored to their needs.

Agro-negocioso, the new loan, allows farmers to pay only interest until harvest, when the whole amount is due, making it suitable for horticulture crop cycles.

Results

• Positive trends in household incomes – improved incomes, increased household assets and improved food security

• Food security has improved: The average number of meals per day increased from one to two. Those eating two or more meals a day grew from 50% to 80%, and the extent to which they ate food they preferred increased by almost a third.

• Clients were overwhelmingly satisfied with the new loan product – declaring it their loan of choice.

• For farmers who took the new loan, the number of crop cycles grew from three to four. – More crop cycles mitigates the risk associated with the failure of a single crop cycle.

• Project farmers are cultivating larger plots of land to improve their livelihoods.

• Through Male Yeru’s new linkages to other organizations, farmers now have more opportunities to receive training to learn new growing techniques, and the MFI has been able to access new sources of grants, loans and funding.

• Male Yeru’s loan portfolio grew by 109% over two years, an indicator of economic growth in the region.

One farmer used the new loan product to plant a horticultural crop. He sold his crop at a profit, and used some of the proceeds to buy a mushroom house. With a subsequent loan, he purchased inputs to produce mushrooms early in the season, and made a profit again from his mushroom crop.