Climate change and sustainable farming
Financiera Fondo de Desarrollo Local (FDL) is a leading microfinance institution in Nicaragua whose purpose is to offer financial products that contribute to the national development of the country.
The project: Expanding farmers’ education in climate change resilience
- Country: Nicaragua
- Norfund contribution: NOK 1 090 000
A large percentage of FDL’s customers are farmers. To improve the productivity of the farmers and their control of agricultural diseases and to incorporate adaptation to climate change and sustainable environmental practices, FDL has set up a Farmers Advisory Service for its coffee, agriculture and cattle farmers.
The FDL Farmer Advisory Service is run by Nitlapan, a local research and development organisation. Through this partnership, FDL is able to offer technical assistance to its clients in two areas:
- 1. Promotion of financial sustainability through sharing of knowledge and technologies in dealing with e.g. disease, pest management and fertilisation. Advice is also provided in other areas that might be of economic importance to the client.
- 2. Promotion of a coherent environmental approach to mitigate the effects of climate change. This includes promoting technologies to improve environmental standards such as water management, solid waste systems and product diversification.
As part of these services, FDL has also, in partnership with the International Finance Corporation (IFC), started to implement a call centre service and technology application through mobile applications online and radio podcasts.
On average, the advisory service consists of three technical visits, three visits to model farms and four technical assistance calls per farmer. An example of the areas in which advice is given is water supply and how water can be harvested.
Results from the previous seven years of service show that clients have reduced risk of loss, have more sustainable operations and have thereby improved credit risk.
The role of Norfund’s Business Support
Norfund has been a shareholder in FDL since 2016. To contribute to scaling up the Farmers Advisory Service, Norfund decided to cover 20 percent of the total project costs in 2020 and 2021. This means that FDL can afford to provide advisory services to more clients and increase its outreach despite the pandemic. In 2020, FDL conducted 8,471 visits to 2,823 farmers. From January to October 2020, more than 30 percent of clients visited have diversified their crops with the aim of adapting to climate change.