Unlocking access to finance and credit for rural smallholder farmers.
Juhudi Kilimo is a micro-finance institution that seeks to uplift the living standards for financially excluded rural smallholder farmers, through the provision of transformative financial solutions and agribusiness technical assistance.
Juhudi Kilimo will use its partner EFL’s psychometric scoring technology to make 250 loans of average US$ 1000 each over the 2 year pilot period, to farmers who score in varying quartiles on the test. This allows Juhudi to test the different uses of the EFL tool:
1/ as a screening mechanism for applicants with limited or new credit history
2/ as a secondary screening tool for loan applicants accepted under traditional credit evaluation method
3/ as an alternative appraisal mechanism for applicants rejected under the traditional credit scoring method.
The key innovation is testing and refining an approach to credit scoring for rural borrowers in order to reduce their dependence on group guarantees and social accountability, encourage development of financial products and services by financial institutions for this market segment and ultimately, unlock their access to financial services.