Published on 31 March 2018
About this good practice
The main target group of FEA’s the program are self-entrepreneurs or small enterprises in settlements with less than 5.000 inhabitants, agricultural enterprises, local farms and producers of organic agriculture. A significant part of these countryside entrepreneurs (traditionally underserved by banks) pursue agricultural activities in areas that are not covered by MFI branches. To address the needs of this specific target group, FEA developed an integrated package called Credinfo that is part of the rural financing programme. Credinfo allows clients to submit their loan applications online via the FEA’s webpage, alleviating the costly and time-consuming burden of traveling to the MFI’s offices in bigger towns. The processes are fully automated, the credit application program guides the client through the business plan and offers an on-line business analysis. There is a continuous evaluation of the credit applications. There is no need for paper-based administration except for documentation purposes. In addition, rural clients are also offered the possibility to take online trainings in the framework of the rural financing programme. To further enhance the financial inclusion of rural entrepreneurs, FEA is setting up a rural microfinance fund (guarantee scheme). The fund is meant to be combined with tailor-made business development services including trainings for entrepreneurial skill, coaching and consultancy, help in communication and promotion activities.
The investment period was between 2015-2017. The total budget of the program was EUR 52 800 (EUR 28 200 internal costs and external costs up to EUR 24 600).
Evidence of success
28% of FEA clients have a rural enterprise. This represents 132 clients participating in the programme. The average employee per rural enterprise is 1,8.
Potential for learning or transfer
There are innovative aspects about the financial resources mobilized, the guarantee mechanism and the tutoring activity. In addition, the alliance between microfinance institutions, consumers and small farms could be a new instrument to support the activity of local farms.