| farip.org Fund for African Rural Innovation Promotion

farip supports innovation in rural areas and targeted attempts to improve the income of farming families in Tanzania with new business ideas. Small farmers are increasingly focusing their business ideas on fair trade and their own transport chain – without intermediaries – from the collection points in the highlands to the points of sale, and on direct marketing in the city. farip plays the role of both a microcredit bank and a coach and advisor to help these proactive people move forward. This gives them the chance to show in an experimental phase that their ideas can work. Rural startups emerge and become attractive investments.

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Smallholder farmers in Tanzania could produce much more, but they do not receive operating loans as banks demand land as collateral. However, losing the land to the bank in case of crop failure is not an option. Tanzanian farming families have now devised a new credit mechanism: Instead of offering the parcels, the farming families only offer the valuable trees on their parcels as collateral for loans.

With the proceeds from donations, farip can grant loans to small-scale producer families for the production of beans and potatoes. Since January 2024, the second production cycle with loans secured by growing trees has already been underway. Donate now..

HEAVY RAIN BLOCKS THE TRANSPORT OF THE POTATO HARVEST

Dar es Salaam, February 2024. “I could sell everything that is delivered from my homeland, the southern highlands, at the Darajani market in Dar,” says Queen Bahati, a young, proactive woman. “People here demand good staple foods, and small farmers in the villages produce them.” However, deliveries from the interior of the country are currently being cancelled because unusually heavy rains have made the dirt roads completely impassable. As a result, the potato harvest, which weighs tonnes, remains blocked at the collection point in Idete, for example.

Queen Bahati runs a small cookshop in Dar es Salaam with an assistant. She plans to run the point-of-sale right next door, which will need to be supplied regularly. The storage space has already been rented, but the supply of the transshipment point with “transport-by-schedule” from the interior of the country is proving to be a considerable problem.

GRACOMA

Magunguli, November 2023. Tanzanian smallholder farming families could significantly increase their production if they had access to money at the right time for labor in the fields, for seeds, and fertilizers. However, money is always tight in the village. In addition there are no loans that smallholder farming families can afford. The interest rates are too high, and the risk of losing land and houses, which must be used as collateral, is too great.

“But we are rich, just look at all the growing trees we have planted on our land. We just have to wait too long until we can sell the logs,” says Bahat Tweve. Why not offer their growing trees as collateral for loans? Bahat developed “GRACOMA” from this idea. After careful consideration of how credit security could be organized with trees, farip financed the first small-scale pilot project in 2023.

GRACOMA is an experiment that registers forest trees and uses them as collateral for loans. It wasn’t at all certain that such a credit system would work in practice. Until now, it was mainly theoretical discussions that were carefully considered by our project partners in Tanzania. With the success of this first attempt in the fields, we have now achieved a significant milestone: GRACOMA works in practice!

With the first successful attempt in the fields, a crucial milestone has now been achieved: On a village level, GRACOMA is practicable! Now farip want to extend new loans to the 10 existing farming families, but at twice the amount and expand the recipient group from 10 to 100 smallholder farming families.

Read more about GRACOMA here…

Building our own marketing chain

Makambako, July 2023. Currently, the marketing chain lacks one essential element: collection points. These are the places where farming families bring their harvest for “scheduled transport” to the cities. Our own trucks are now operating along the 800 km route from Makambako to Dar es Salaam, ensuring two shipments per month. The concept of “scheduled transport” sounds obvious in Europe, but in the Tanzanian countryside, it’s new. It seeks to offer regular and dependable marketing opportunities at transparent prices for small-scale farming operations. The target consumers are the urban population with low incomes. With the proceeds from this newsletter’s donations, farip intends to provide the initiators with a one-year loan to construct and operate the first collection point in Makambako.

Fattening cows, can this work?

Msowero, May 2023. It all depends on the rain. Because the rains did not come last year, many farmers in Msowero were unable to harvest maize. Instead of selling it, they used the previous year’s stored maize for sowing. This is why they could not pay back the advance payments from the trading company TBM. To stay in the maize business with TBM and pay off the debt quickly, they produced an idea: to buy skinny free-range cows cheaply from the Maasai and fattening them on their farm for five months. The proceeds will serve to pay off their debt. They hope that the rains will cooperate this year.

Read the whole story..

Testing the suitability of the GRACOMA idea

Magunguli, spring 2023. Our local partner and trustee Elibariki Tweve visits a forest plot of farmers in Magunguli. He is about to register the trees growing there as loan collateral. With a small-scale test run, farip is testing the suitability of the GRACOMA idea, which was developed by the farmers themselves: GRACOMA (Growing Assets Collateral Management) is designed to enable farmers who previously had no access to credit to offer growing trees as collateral for loans.