How microfinance really works

Videos and interviews show the impact of microfinance on small-scale agricultural producers in Colombia and Peru.

The Microfinance for Ecosystem-based Adaptation (MEbA) project facilitates access of small-scale farmers to microfinance products and services for investment in sustainable adaptation practices, improving their income and resilience towards climate change effects. The targeted farmers in the Andean region of Colombia and Peru are characterized by high climate vulnerability stemming from low income (about USD 500/year), lack of access to social or financial services, low technical capacity and high exposure to climate risks. Their landholdings are smaller than 10 hectares.

Staff from microfinance institutions (MFIs) interviewed clients to get a sense of how investing in Ecosystem-based Adaptation (EbA) alternatives has enabled these small-scale farmers to prevent climate risks, diversify production and income, increase productivity or profit from arising opportunities. These personal stories show the reality of small-scale farmers, whose livelihoods depend directly on reliable weather patterns and healthy ecosystems. The interviews are available on the website of the project in English and Spanish.

Many report that in recent years and decades, rainfall patterns have changed, the planting and harvesting seasons have shifted, making them more unpredictable, and the frequency of natural disasters and outbreaks of new crop diseases has increased. Thanks to awareness-raising material provided by MEbA, the farmers are becoming more aware of the connection between the effects of their farming practices and the maintenance or degradation of ecosystems and their services.

MEbA developed capacity in five MFIs to raise client awareness on climate change, offer these farmers sustainable adaptation alternatives, finance investments and facilitate technical assistance through partners. For the latter, the project implemented demonstration farms to offer guidance on how to implement EbA solutions and increase demand for this type of sustainable loans. MFIs and their technical partners organize regular workshops with clients and the general public to raise awareness, increase adaptation capacity and offer their financing services. This is an innovative example of catalyzing private sector investment in scaling up deployment of climate technology solutions for resilient agriculture practices.

MEbA is an International Climate Initiative (IKI) project, financed by the German Environment Ministry (BMUB) and implemented by the United Nations Environment Programme (UN Environment). The MEbA website also presents videos on the project activities and outputs.