Farmer Finance

Ethiopia

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Project Closes April 2014

World Council of Credit Unions entered into an agreement with the United States Department of Agriculture (USDA) to implement the project "Enhancing Food Security and Rural Livelihoods in Ethiopia through Strengthening Agriculture and Credit Unions." After executing an agreement with the Ethiopian Ministry of Agriculture, project implementation began and continued through April 30, 2014.


Implementation began with a baseline study to determine needs of the rural poor in Ethiopia. The baseline study identified areas of concern related to agricultural productivity and food security: access to improved inputs, technical assistance, credit, and irrigation.

In coordination with the Government of Ethiopia (GoE), the project decided to operate in three very distinct regions of Ethiopia: Tigray, Oromia, and Amhara, each with dramatically different needs. Using a three pronged approach, World Council was able to go above and beyond the expectations in the original project design.

First, providing farmers with access to technical assistance via assistance from the GoE at Farmer Training Centers (FTC) was a strategic component to introduce farmers to new planting and harvesting techniques. The new methodologies along with access to improved inputs pushed farmers to grow their incomes by more than 300%.

Second, through discussions with GoE officials, World Council planned and constructed schemes to provide access to irrigation and improve infrastructure throughout the three operational regions in Ethiopia. The availability of water for the crops improved the yield for farmers by more than 51% compared to the targeted 10%. Through extensive discussions with GoE, World Council identified three commodities, one for each region, to develop value additions and streamline processes-honey in Tigray, mung beans in Amhara, and white pea beans in Oromia.

The third and final prong was access to credit. All Rural Savings and Credit Cooperatives (RuSACCOs) in Ethiopia are run by volunteers and in order to serve the overwhelming need for credit and savings by farmers, capacity building sessions were needed. Prior to a multitude of trainings, board members, responsible for operation and direction of the RuSACCO, did not understand the difference between shares and savings. Further, the board members could not compound interest rates or compile a balance sheet or income statement. With professional staff in place and trained by World Council, almost all of the 164 RuSACCOs involved in the program were able to successfully complete a balance sheet and income statement without assistance. To address the initial liquidity gap, World Council created a revolving loan fund to allow the RuSACCOs to expand membership and cover credit requests. Through this initiative, along with a savings mobilization campaign, membership grew by more than 350% and savings grew at an astounding rate of 3,100% from January 2010 to January 2014.

Two sub-grants were awarded to support implementation of the project. The first award was to International Orthodox Christian Charities (IOCC) on June 2, 2011 to support implementation of Activities 1 & 2. IOCC has extensive experience operating in Ethiopia for more than 20 years. The second sub-grant was awarded to ACDI/VOCA on July 1, 2012 through a project modification. World Council provided a sub-grant to ACDI/VOCA in local currency in order to increase the US dollars available in the project. In return, the award allowed ACDI/VOCA to expand implementation of its USDA-funded project in Ethiopia to increase production for the pastoralist community.


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