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Input value chain/Ethiopia - Farmers in regional states benefit from electronic credit

19 October 2015

Ethiopia’s Ministry of Agriculture (MoA) is upgrading its recently introduced voucher credit system, through which farmers obtain seed and fertilizer by means of an added electronic system, e-voucher. The Agricultural Transformation Agency (ATA) is testing the e-voucher credit system in several regions within the country. Under this new system vouchers, inputs (fertilizer, seed, chemical) are purchased by a farmer at a microfinance institution by either cash or credit and then redeemed at a multi-purpose cooperative. The benefits of the new system are to offer access to credit for farmers, remove the burden of handling large amounts of cash from the cooperative system and reduce the exposure of regional governments under the guarantee provided to secure a loan to import inputs. A local company has developed the software that will be used for the e-voucher after being selected through bidding, according to ATA. The e- voucher credit system is planned first to be operational in four regional states namely Tigray, Oromia, Amhara and the Southern region. Farmer's accessibility to mobile phone is not required to operate the system. Satellite offices of microfinance institutions with mobile phones, are adequate.



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