Background/Objectives
The need for increased climate adaptation funding is critical, especially for small holder farmers (SHFs). SHFs are facing significant cultural and economic barriers in accessing financial services and needed training to enhance farm productivity and resiliency amidst frequent and devastating extreme weather events. Traditional financing methods for small-scale agriculture are hindered by such risks, particularly in underdeveloped credit markets. Dalberg and IDH highlight a $170 billion annual financing gap for smallholders, underscoring the crucial role of NGOs working with local financial institutions to bridge the gap.
Opportunity International’s Climate and Resilience Strategy prioritizes climate adaptation measures, focusing on last-mile interventions that meet the needs of SHFs struggling to adapt to climate shocks. Our goal is to ensure that SHFs have the tools and resources to maintain and grow their farms and businesses sustainably. The adoption of climate adaptation strategies can be costly as farmers transition from traditional techniques. Therefore, Opportunity International focuses on making climate finance available through a network of ag lenders to develop products that prioritize and incentivize regenerative agriculture practices.
Approach/Activities
Opportunity leads three pilot projects designed to assess widespread adoption of regenerative agriculture practices:
• A soil health and climate resilience initiative serving 2,500 rural families in Malawi
• An inclusive finance and education initiative supporting 24,000 smallholder farmers through Opportunity International farmer support agent networks in Rwanda
• An initiative in partnership with IUCN Uganda and the Ugandan Ministry of Water and Environment aimed at reforestation through regenerative ag trainings, financial services and seed distribution, reaching over 400,000 people
To bring this work to scale, Opportunity has innovated The Climate Collateral Alliance (CCA), currently in late-stage development powered by design funding from the Catalytic Capital Consortium and the Catalytic Climate Finance Facility. CCA takes a novel approach in its credit support to Financial Institutions originating loans to farmers practicing regenerative ag by combining commercial capital, catalytic capital and technical assistance to encourage and incentivize climate-smart practices among farmers and ag-entrepreneurs.
Results/Lessons Learned
Through consultation with both farmers and financial institutions, we are learning and will share perspectives on effective interventions and how impact investment strategies can bring these interventions to scale.