How a novel financing tool is helping bring the private sector into difficult markets

More than one-third of people in Senegal work in agriculture, many tending to small plots of 15579644066_69e846aaa7_cmillet, rice, and ground nuts.  Despite their importance to Senegal’s economy, these farmers often cannot afford the fertilizers and high-yield seeds so crucial to improving productivity.

To change that, one of Senegal’s leading microfinance institutions, Union des Mutuelles Alliance de Crédit et d’Epargne pour la Production (UM-ACEP), has long been providing loans to farmers. But it faces a challenge — one I have seen all too often in Sub-Saharan Africa. To reach more farmers, UM-ACEP needs capital, and many financial institutions are hesitant to lend the company money. They fear that UM-ACEPs business is too risky because their customers are smaller businesses with limited experience and undocumented financial performance.

So, IFC has stepped in.

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