"When I work with loan officers in the field, I realize that we have a different approach than other institutions," explains an advisor from Soro Yiriwaso, one of the 6 financial institutions that participated in the Agricultural and Rural Financing in Mali (FARM) project conducted by Développement international Desjardins between 2014 and 2021. This different approach is to make respect for the environment an essential dimension of the agricultural financing process.
To achieve this, the FARM project has adopted an environmental strategy with 3 main components: climate risk management, capacity building for financial institutions and capacity building for farmers and other stakeholders in the agricultural value chain.
1. Supporting and documenting good practices
First, a range of tools have been developed to encourage financial institutions to adopt environmentally friendly practices:
- A proposed environmental and social policy and an environmental management manual
- A tool to categorize agricultural projects according to the environmental risk they represent
- A green office guide to reduce their environmental footprint
Technical itineraries were also developed to guide agricultural practices. Twelve technical crop sheets, including 3 sheets on organic farming, were produced to guide both producers and financial institutions. Compliance with these itineraries has become a prerequisite for subscribing to the crop insurance program developed under the project.
2. Training loan officers
A training program on environmental and social risk management was developed and disseminated to financial institution staff to help them better assess these risks when analyzing a credit application.
The trainees were unanimous in saying that their ability to understand climate issues had improved as a result of the training. "In our case, everyone participated," said an advisor from the BNDA national bank for agricultural development. "Advisors in the field are now able to explain what the consequences of certain environmentally unfavorable practices are, and that allows producers to respond."
3. Raising awareness among farmers
Financial institution advisors were also trained and equipped to raise awareness among agricultural clients of the environmental and social risks associated with their activities. Loan officers have thus become agents of change for farmers.
To start the conversation more easily, especially with women's groups, loan officers were able to rely on pictorial tools in French and Bambara presenting the practices to adopt and to avoid. "Thanks to these awareness-raising tools, women are able to adopt this behavior of respect for the environment in order to stay healthy and protect their crops," said a loan officer in the Nyèsigiso cooperative network.
A commitment that pays off
Before the FARM project, Malian financial institutions did not discuss the environment with borrowers. Today, the 6 participating financial institutions have integrated this awareness-raising approach into their agricultural financing process.
For the Kafo Jiginew financial institution, the adoption of an environmental policy and an environmental risk management system made it possible to obtain financing from the European Investment Bank. The institution also plans to set up an environmental and social risk management department in the coming year.
Building on the new methodologies acquired through the FARM project, the participating financial institutions now plan to offer green financial products that will encourage the acquisition of new technologies that are more resilient to climate change.
The FARM project was made possible with the financial support of Global Affairs Canada.