Marina Kortenbusch, who serves as the Head of the European Microfinance Platform (e-MFP’s) Rural Outreach and Innovation (ROI) Action Group, is the Managing Partner of Switzerland’s Business and Finance Consulting. Josien Sluijs is an e-MFP board member and Director of the Netherlands’ Platform for Inclusive Finance, which is also a member of the ROI Action Group.
MicroCapital: Why is it important to serve rural markets?
Marina Kortenbusch: In most emerging economies, the rural sector employs a large share of the working population. Developing rural markets is an effective way to boost prosperity by increasing the incomes of individuals whilst also contributing to food security, reducing environmental impact and increasing exports.
MC: What are some key differences between rural and urban markets?
MK: The incomes of many rural residents fluctuate with the seasons and are more exposed to weather conditions and natural disasters than those of their urban counterparts. This elevates the importance of insurance products tailored to meet their needs. These can help stabilize incomes and encourage investment in business growth.
MC: What is new in product design for agricultural producers?
MK: Value chain finance has provided a fresh approach to supporting farmers. This is achieved by working in coordination with stakeholders such as processors, distributors and financial institutions to provide credit to farmers indirectly. For example, farmers may rent space to store their product until prices increase but pay the rental cost only after selling the product. Or financial institutions can provide credit to agricultural input suppliers to allow farmers to pay for seeds, fertilizer and pesticides over time. Non-financial services such as artificial insemination and agricultural technologies can also be incorporated.
MC: How will the Rural Outreach and Innovation (ROI) Action Group contribute to European Microfinance Week?
MK: During the pre-conference day, Action Group members will present their rural development initiatives and highlight both implementation challenges and successful adaptions to local circumstances. During the main conference, members will take a global perspective, showcasing recent innovations in the development of rural markets. This session will include an examination of combining financial and non-financial services as well as an exploration of the advantages and challenges of value chain finance.
MC: What do you foresee for the future of rural finance?
Josien Sluijs: We can only serve rural areas with technological innovation; otherwise it simply is too costly. Worldwide, we have about 2 billion people still to reach, and a large number of these people live in rural areas. All ten of e-MFP’s Action Groups support actors in inclusive finance to work toward the UN’s Sustainable Development Goals, of which several are related to serving rural areas.
This interview is part of a sponsored series on European Microfinance Week, which will be held from November 16 through November 18, 2016, by e-MFP, a 125-member network located in Luxembourg. MicroCapital has been engaged to promote and document the event.
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