After the six-month term, 96 percent of the loans were paid back in full, proving that farmers can use extra capital effectively and pay back loans on time.
As a result, LEAD has released more capital for qualifying farming cooperatives--supported by USAID FED --that divide the money among members.
The loans are expected to benefit over 250 farmers and agribusinesses in the coming six months.
"Contrary to what Liberian banks and lending institutions have professed, farmers have the highest repayment rate compared to borrowers in other sectors", says
"It's about time the financial institutions start looking at small businesses that are desperately in need of help to expand," Gweh added, according to a release sent the
Liberian farmers face barriers in accessing credit because they have inadequate or no business records and they lack collateral for loans. Banks often see farmers as a risky investment because of the misconception that non-repayment is common.
In the first round, 30 members of the Menlehkoyee vegetable farming group in Nimba County received a loan worth L$250,000.
In five months, the group had already earned enough money to repay the loan and interest. By the end of six months, the group earned L$487,000, recording a profit of L$237,000.
"It's hard to make my farm profitable on my own. We can't get enough money to expand or start a meaningful business. Having a loan has given our group a new opportunity to create something meaningful," says Yar Yeanue, the Chairwoman of Menlehkoyee group.
LEAD is a recipient of a grant from
In addition, LEAD has received support from the
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