Impact stories of small-scale forest and farm producers and their organisations: On the path to more inclusive finance

Small-scale forest and farm producers and their organisations (SSPO) face many barriers to access private finance. Despite many efforts to overcome these barriers, SSPO still find it difficult to access finance in support of their sustainable economic activities in the agriculture and forest sectors.

In 2022,together with our network partners, we reviewed the barriers and identified possible working solutions. Since then, we started applying the lessons learned. However, we found that accessing finance will become a reality only if income is secured. To achieve thriving locally owned businesses, it is, therefore, more important to achieve an acceptable, fair, and stable income than to increase the flow of private finance to SSPO.

With this knowledge, the Tropenbos International (TBI) network is supporting local farmers and community groups to pilot their business ideas. The pilots are used to gather more information on the business case, strengthen capacities, and build trust between the off-taking company and the business case proponents.

Each case is oriented towards diversifying income; involves an off-taking company prepared to support the groups to improve their capacities; and has received some seed money as grant or loan to implement the pilot. TBI and its partners helped the SSPO transform their business idea into a proposal and facilitated the links to off-takers and seed finance.

For scaling successful pilots, locally appropriate financial instruments will be needed, meeting the demand for finance from these cases in terms of ticket size, payback period, interest rate and possibly other risk reducing conditions. This is a separate story but is unfolding simultaneously. Working with (local) financial institutions is the next step on our pathway to more inclusive finance.

Now, we share with you stories on why, how and with whom these local groups are implementing successful projects in Ghana, Indonesia and Vietnam:

• All-women cooperative transforming cocoa waste into energy in Ghana
• Promising outcomes in the revitalisation of rubber agroforests in West Kalimantan, Indonesia
• Rooted progress – Marking the first year of a community-based sustainable forest management programme in Ketapang Indonesia
• Advancing coffee agroforestry in Viet Nam’s national Payments for Environmental Services (PES) policies

Please feel free to contact us with any questions or suggestions for our next steps.