[Agrilinks] Filling the Finance Gap for Smallholders: “Confidence Instead of Collateral”

[Agrilinks] For many years, smallholder producers of high-value horticultural products in Kosovo have faced the typical “missing middle” access to finance challenge. Most producers have less than 1 hectare (ha) of land, and correspondingly low amounts of collateral to borrow against. Yet, many individuals do not qualify for or cannot access financing designed for the poorest of the poor. Interest rates from microfinance institutions (MFIs) often exceed 20%, and bank finance is unavailable for loans of €5,000 or less. For those who can access credit, products specifically designed for the agricultural production cycle are limited and individual transaction costs are high. While most major banks promote agricultural lending on paper, in practice, opportunities for smallholder lending are limited.