Sustainable increases in farming production in the Global South, are not just a question of spreading knowledge and about know-how or improving practices. While these are vital first steps, many farmers and countries are already beyond this point. We now head to Costa Rica. Here, the major obstacle for many small- and medium-sized farms is finance. Loans and investments are important for a farmer to conduct her business. But in many rural areas, interest rates for microcredit are around 35% per year. Such rates are simply prohibitive for many small-scale farmers and prevent them from being able to expand their production. This, of course, inhibits growth. Marianella Feoli, the director of Fundecooperación, explains why it's so difficult for farmers to obtain microcredit, and how the organisation she works with can help. I'm Marianella Feoli, and I'm the director of Fundecooperación for Sustainable Development, which is an organisation that promotes sustainable development in Costa Rica through financial support. The main challenge that agricultural producers in Costa Rica face is access to financing. Especially, since their capabilities don't agree with the national banking system, because they don't have the ability to formulate a project plan to present the bank, or they don't have suitable conditions, experience or payment methods. At Fundecooperatión, we have sought to make those deals in the agricultural sector, and we have focused on a customised credit program, which implies that we, through microcredit or microfinance, endorse the producers that face these challenges of not having access to money. For example, what we do is: we adjust the payment conditions, the payment method and the payment terms and the cost as per the client's project. Fundecooperación has experts in the different fields of agriculture. That means they are able to tailor finance programmes to the specific needs of different farmers. The microfinancial program is called Crédito A Su Medida (Tailored Credit). Within this program, there are several specific products e.g. climate agriculture that finances climate initiatives for producers who need that, but generally also different transformations. The program is called Tailored Credit, because, what we do depends on the conditions of the project: the payment method, the type of crop, the type of product that will have income at different times or with different flows. Then, we adjust the conditions of payment, period of grace, the type of guarantee depending on the project. So, Tailored Credit implies that each credit has different conditions. There are certain basic conditions that are always required, but, a coffee producer will probably have annual cycles, a dairy producer will have different monthly flows, and a cattle producer will probably have a form of payment depending on, when he manages to raise the animals that they raise or breed. With many different sectors, what we do is that we sit with the producer, with our client, and understand the project well and help in finding the best alternatives for your credit. The work of organisations like Fundecooperación would not be possible without access to public monies. Through public-private partnerships, public funds can be made available to support an innovative private sector, with the right experience and the knowledge to make changes in the food system. We have focused on addressing the needs that make it difficult or that are main challenges of access to credit. One of social guarantee, for example, we have an alliance with an institute called El IMAS, and it has a guarantee fund that deals with population and social vulnerability, and so, we grant the credit and the previously mentioned is the endorser of the guarantee. This gives immediate access to a limit of 7 thousand dollars in colones, and so the producer has a guarantee, an endorsement, we give him the credit. The value of Fundecooperación is also that we follow up and support in the transformations that have to be made; we make sure that if the transformations, changes and improvements needed to raise the level of your farm make sense, then we help with the development of project projection flows, an analysis of alliances if those are necessary and market level improvement to be sure, because our success is their success, so to be sure that the producer will implement the measures creating a good result immediately, immediately in terms of the project being a result in better income, less social and mental impact or better conditions, and taking advantage of environmental variable and a greater social impact on the community.
