MICROSERFIN | Improving credit methodology and agricultural risk management

microserfin.com

The Microserfin project is designed to complement the Huruma Fund loan. Its objective is to develop an advanced methodology for agricultural risk and credit management in line with the latest market developments. It includes market and client characterization studies, gap analysis, piloting and adoption of an improved agricultural and credit risk management methodology, as well as a review of the organizational structure and a training plan.

The implementing entity is Frankfurt School of Finance & Management GmbH, a consultant committed to improving financial markets and increasing access to financial services worldwide. It designs and implements consultancy and training programs, also conducting applied research into finance and management issues.

Up until now, surveys have been conducted with agricultural clients to determine various socio-economic aspects of their farming business, including the effects of climate change on their crops. Branch offices and potential suppliers of solar-powered agricultural equipment have been visited, and market and climate risk analyses have been carried out.

Two new agricultural products have been proposed: Rapifin and Solución, which will make officials’ analysis more efficient. Furthermore, a green product will be launched in the form of financing for water pumps powered by solar panels. The development of the agricultural technical sheet model and the proposal of the “green product” to be used in the pilot project has been initiated.

Country: Panama

Total project amount: EUR 100,000

% Financing TAF Huruma: 80%

Field of intervention: Agricultural preparation of the entity

Status: In progress

Project start / end date: July 2023 / March 2025

MICROSERFIN | Microfinance Institution

microserfin.com

Microserfin, a leading microfinance institution that is part of the BBVA Microfinance Foundation, focuses on financial inclusion of the most vulnerable microentrepreneurs in Panama. The institution offers productive loans, as well as microinsurance, financial literacy, technical assistance and health services.

Microserfin is a pioneer in providing agricultural loans in Panama, being the only relevant player with a product that serves small farmers through a methodology adapted to productive cycles. The institution is in the process of refining and digitising the agricultural lending methodology, including a significant improvement in risk management.

Microserfin is working on the development of an environmental policy based on the Group’s experience. In 2020, the MFI started measuring carbon footprint (with 0.34 CO2 emission by employee), currently focusing on improving highest environmental impact related to Marketing & Client Experience areas.

CFE | Microfinance Institution

cfe.com.pa

 Centro Financiero Empresarial (CFE) is one of the most inclusive MFIs in Panama, providing financial products to MSMEs and entrepreneurs at the base of the economic pyramid, the missing middle, in a country with a very fragmentated and underpenetrated microfinance market. CFE was founded in 2009 and has identified agricultural financing as the key to effectively fulfilling underserved farmers’ needs.

CFE serves the agricultural sector through standard commercial loans, with plans to specialise in this underserved niche market. Huruma’s technical assistance would assist in this multi-product strategy, contributing to the launch of an agricultural product. . In addition, CFE is expected to implement a segmentation of clients by credit risk and the identification of market niches with potential demand.

CFE is planning to incorporate green loans product offer in 2022-25 to support its environmental strategy. It has recently launched its environmental social responsibility policy, including initiatives to create environmental awareness among employees and clients and generate good practices among the financed enterprises.