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Small loans, big goals

April 26, 2016

Small loans are helping farmers in Colombia arm themselves against climate change and protect the ecosystem. But they have to prove they are spending their microcredit on sustainable measures.

Artikelbild Kolumbien
Image: Holger Trzeczak

Microloans for farmers in Colombia

Project goal: Providing microloans so that small farmers in Colombia and Peru can adapt to climate change while protecting the environment
Project implementation: Credit recipients must prove that their measures are protecting the ecosystem and climate
Project size: More than 20 million euros will be granted in 24,000 individual loans until 2019 in Colombia and Peru
Project partners: International Climate Initiative (IKI), United Nations Environment Programme (UNEP), Frankfurt School-UNEP Collaborating Centre for Climate & Sustainable Energy Finance
Partner Institutions: Bancamía, Contactar and Crezcamos in Colombia; Fondesurco and Solidaridad in Peru
Project volume: 4 million euros funding through IKI
Project duration: January 2012 to December 2017

In southeast Colombia, small farmers' fields are suffering due to more frequent dry spells. While microcredit programs don't help directly, the money can finance climate change adaption measures. Often, just a few thousand euros will do. Such a sum could buy a septic tank that allows farmers to reuse water, or a biogas system that generates energy and heat, discouraging logging. Under the MEbA scheme, farmers also have to show they are protecting biodiversity with their measures. While the concept of microcredits isn't new, using the loans in this way is indeed innovative. The providers also tailor the loans to insure that farmers can pay them back.

A film by Holger Trzeczak