FCI’s Commercial Village Savings and Investment Model is based on saving 10% of sales per season to close inclusion gaps in access and use of financial services. Financial education needs to be enhanced to foster the use of financial services by marginalized communities especially youth and women and FCI is currently doing this through the Commercial Village Model approach in partnership with various service providers such as Banks, Sacco’s and Cooperatives to build awareness and capacity to remove barriers to accessing finance.
Financial inclusion seeks to widen access to financial services to poor which reduces inequality and promotes social mobility. With access to loans, savings, insurance, smallholders are better able to manage risks save money for emergencies and invest in education and business opportunities. According to Global Financial Inclusion Index the global number of adults with access to formal financial services rose from 51% to 62% only in 3 years (2011-2014).
According to World Bank report 2016, more than 2 billion adults do not use formal financial services and more than 50% in the poorest households are unbanked. Farm Concern International, FCI addresses this challenge through the Commercial Villages Savings approach embedded in the FCI’s Commercial Villages Model. This approach promotes saving culture among the smallholders in the Commercial Villages and facilitates partnership development with financial institutions to access financial services. The Commercial Village Savings and investment scheme is based on income from commodity sales facilitated through the collective marketing. With increased and predictable incomes, households deliberately set aside savings on regular and predetermined basis with targeted investment objective including input acquisition, family medical care, education and clothing among others. The approach integrates women, youth and other rural poor who mostly are vulnerable to financial exclusion and ensures that they play an active role in the utilization of the savings. The buildup of savings demonstrates proven cash flow for farmers which is attractive to financial institutions as a basis for lending. Additionally, regular savings by farmers and proper record keeping inculcates a financial discipline that profiles farmers better to financial institutions.
FCI VISION : To have commercialized smallholder communities with increased incomes for improved, stabilized & sustainable livelihoods in Africa and beyond