Since 2016, LFS has been working on a project in Peru in collaboration with the Peruvian Development Bank Corporación Financiera de Desarrollo (COFIDE), supported by funding from KfW. The objective of the project is to increase access to finance for the largely underserved micro and small enterprises in rural markets, with a strong focus on agricultural value chains. This is done by supporting selected partner financial institutions (PFIs) with introducing and rolling out suitable financial products for the rural and agricultural target groups. Special emphasis is placed on the financing of equipment and machinery which allows for positive effects on agricultural production, employment income for rural Peruvians.
At present, LFS works successfully with three regulated PFIs in Peru. LFS supports these PFIs with comprehensive, tailored technical assistance service solutions in fields such as market research, strategic business planning, product development, risk management, human resources, training and pilot testing of agricultural and value chain finance. The goal is to scale up agricultural and rural finance in a commercially successful manner to create lasting product solutions for the PFIs.
Market research revealed that the three PFIs are capable of reaching out to at least 800,000 agricultural businesses throughout Peru. These include smallholders with less than 1 ha of land. After successfully reaching the growth targets of the PFIs market share of 10% - 20% in the medium term, this would result in access to finance for 80,000 - 160,000 agricultural clients.