About half of Zambia‘s population lives from agriculture. 98% of farms are run by smallholder farmers, often with less than two hectares of land. Smallholder structures predominate, especially in the Eastern Province. Zambia‘ s agriculture is characterized by low productivity, for a number of reasons. There is poor access to inputs, production methods are not adapted to agro-ecological zones and climate change, market access is insufficient, and farmers lack capital for agricultural investments. This is where the global programme “Promotion of agricultural finance for agri-based enterprises in rural areas” (AgFin), funded by the German development agency GIZ, comes in. GV (global programme) AgFin Zambia promotes financial literacy among farmers and advises financial service providers (FSPs) on the provision of savings-related products and, above all, credit products tailored to smallholder agriculture. Both FSPs and farmers highly appreciate the financial literacy trainings because they help to reduce ignorance in financial matters and fear of contact with FSPs. Productive use of credit, combined with agricultural practices that are adapted to climate change and increase soil productivity, can help small farms to significantly increase their income. In addition, the preconditions seem to be present for the state to continue to improve general financial literacy and for financial transactions to be progressively digitized. This means that the project can be classified as good practice.
Gaesing et al. (Sun,) studied this question.