Module 4 - Malawi, Kenya, and Uganda: Developing Rural Agricultural Input Supply Systems for Farmers

• There is a strong positive correlation between the availability of credit and the volume of trade in fertilizers and other agricultural inputs in rural areas. The use of credit guarantees in Kenya, Malawi, and Uganda to help input suppliers finance their inventory is showing impressive results. It is helping to relax the high capital constraints faced by rural stockists, allowing them to significantly expand the range and volume of fertilizers and other inputs supplied to rural areas. The experience with credit guarantees in Malawi shows that every dollar of credit guarantee provided to the agricultural input supply companies generated sixteen dollars worth of supply of fertilizers and hybrid maize seed from the companies into rural areas—a leveraging ratio of 1:16. Efforts are needed now to scale up the training and establishment of rural stockists across Africa. Countries also need to now establish National Agricultural Input Credit Guarantee Facilities to link input supply companies to the trained agrodealers. This safeguard will help to reduce the risks they face in supplying inputs to the poor in rural markets.