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Photo: Magdalena Vogt
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Welcome back! We hope you’ve had a chance to rest and recharge over the summer. As we return from vacation this year, one thing is clear: there’s no time to waste.
The global economic headwinds aren’t easing up, interest rates are climbing, climate risks are rising, and for many farmer-based organisations and women entrepreneurs, the pressure is intensifying. Now is not the time to scale down. On the contrary, this is when our work matters most.In this newsletter, we want to share an interview with Geoffrey Kioko Musyoki, Regional Agriculture Specialist at Oikocredit. He lays bare the unprecedented challenges facing women entrepreneurs and farmer-based organisations in today's volatile economic landscape, but also how the IFIL programme is helping them build resilience and adapt to change. |
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Finance in Flux The global financial landscape has shifted dramatically, creating new challenges for the women entrepreneurs and farmer-based organisations (FBOs) that the Innovations in Financial Inclusion for Livelihoods (IFIL) programme serves.
Rising interest rates, inflation and economic uncertainty are not just abstract concepts for these communities; they translate directly into reduced access to credit, squeezed household budgets and higher borrowing rates. |
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The cost of global uncertainty
“The cost of borrowing has increased significantly,” says Geoffrey Kioko Musyoki. “When inflation rises, more income goes to basic needs, and less liquidity is available for savings or business development.”
For women entrepreneurs – whether farmers or small business owners – the impact is particularly severe. Often lacking traditional collateral, many are scaling back operations or turning to informal lenders, some of whom may resort to extreme collection methods.
Currency volatility compounds the situation. In Kenya, hedging premiums for local currency loans have soared from 14% to over 20%, which can lead to over indebtedness.
“We've not been able to do local currency loans for the last two to three years,” notes Musyoki.
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| With no collateral, many women are forced to turn to informal lenders, sometimes at a high personal cost. Photo: Magdalena Vogt |
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Multiple pressures converge
The financial strain is just one layer of a multifaceted problem. Climate change adds further complexity, as banks increasingly incorporate climate risk into credit assessments.
For farmer organisations exposed to drought, floods and unpredictable weather, this creates additional hurdles. However, there are also opportunities for those who can align with climate finance initiatives and adopt climate-smart financial products, such as weather-index insurance.
Geoffrey:
“Farmer organisations also need to build their capacity around this and report on climate metrics to tap into these new funding streams.”
Trade disruptions compound these challenges and mean a drop in revenue if famers are not shock responsive. While African markets aren't direct targets of global tariffs, indirect effects like rising transport costs and supply chain delays are hitting FBOs hard. Coffee and grain cooperatives are struggling to find buyers after some humanitarian organisations redirected their resources elsewhere.
“For every application we process, we have to demonstrate that the borrower is resilient to the vagaries of the weather,” says Geoffrey. |
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Emerging regional solutions
However, some cooperatives are finding opportunities in regional value chains and local sourcing. The African Continental Free Trade Area is a promising initiative for better market access.
“Current trade barriers create absurd situations. It's easier and cheaper to import coffee from the Netherlands than directly across the border from Ethiopia due to tariffs and border delays,” Geoffrey explains.
This trade area is likely to free some of these challenges, moving commodities from areas of plenty to areas of shortage.
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Digital innovation
The accelerated digital transformation presents a complex paradox for women's financial inclusion. Mobile wallets and digital lending platforms can reduce service delivery costs and reach remote areas, but these same tools risk excluding women, older clients and rural populations who lack access to smartphones or digital literacy.
“Farmer organisations must embrace digital tools like mobile wallets and e-records, not only for efficiency but also to build credit histories,” he explains, pointing to Kenya's M-PESA platform where farmers are increasingly paid digitally.
However, he warns that “without deliberate design for inclusion, these digital finance solutions could easily widen the gender gap rather than close it,” as algorithmic credit scoring may exclude women who lack formal credit histories despite having strong repayment capabilities. |
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IFIL-farmer Joseline Tuhaise and her husband Sanairi discuss digital tools with Oikocredit’s Elikanah Nganga.
Photo: Magdalena Vogt |
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Success stories amid the storm
Despite these headwinds, IFIL’s approach is making a measurable difference, especially in gender representation. 40% representation by women in leadership roles across participating cooperatives represents significant progress in traditionally male-dominated structures. Of 225 board members across 30 FBOs, 85 are women.
“This isn’t just token representation,” Geoffrey stresses. “These women are active, empowered and making strategic decisions.”
The Kilalani Coffee Cooperative in Kenya exemplifies IFIL's transformative approach. Through a small IFIL credit facility, they drilled a borehole, replacing contaminated water that had been affecting their coffee quality. This intervention not only improved income but also freed women from spending seven hours daily fetching water, time they can now invest in productive activities.
Oikocredit’s capacity building efforts have equipped over 30 farmer organisations with skills in financial management, breakeven analysis and financial planning.
“We’ve seen real change. These cooperatives are no longer where they started,” Geoffrey says.
“They are articulating their business cases and seeking funding on their own terms.”
A call for continued partnership
As IFIL's current phase concludes, the need for its unique combination of capacity building and catalytic finance has never been greater.
“Now is not the time to scale down,” Musyoki urges.
Targeted, sustained investment in women entrepreneurs and farmer organisations is essential – not only to survive today’s crisis but to build stronger, more equitable communities for the future.
“For us, it’s not just about capital,” Musyoki concludes.
“It’s about partnerships, building institutions, embedding resilience, embracing feedback and fostering long-term commitment.”
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