You may already know that Opportunity International’s agricultural finance initiative helps smallholder farmers in Africa enhance their agricultural yields, household incomes and living standards. What you may not know, however, is that the program also protects both our agricultural clients and financial institutions against some of the key risks associated with global climate change, including catastrophic farm losses. Opportunity International is addressing climate change in a variety of ways, including through these three key strategies:

• Offering Climate-Smart Financial Products. Opportunity is developing and refining financial products to help farmers effectively respond to climate change-related realities. For example, we provide loans designed to provide farmers with water management and water storage resources in several African countries. This financing is critical to reducing the impact of unpredictable weather patterns caused by climate change – such as greater flooding, increased drought and less predictable periods of rain. In Uganda, more than 200 farmers growing citrus have benefitted from access to loans for irrigation equipment.

• Implementing Climate-Smart Risk Management Practices. We implement risk management practices that position both smallholder farmers and our financial institutions to continue making meaningful contributions to agricultural development despite the effects of climate change. One of our key priorities is to maintain a well-diversified agricultural loan portfolio in each country. In Ghana, where cocoa-growing is widespread, we provide financial services and training to many cocoa farmers, but have also diversified our lending portfolio to include crops such as rice, mangoes, cashews and root vegetables. This approach is important to ensure that our agricultural program can help a growing number of smallholder farmers over time, even if climate change creates challenges within specific value chains.

• Establishing Climate-Smart Strategic Partnerships. Opportunity collaborates with other leading organizations to safeguard our agricultural clients and financial institutions against climate change risks. We partner with entities including Kiva and the US Agency for International Development’s Development Credit Authority to access credit guarantees. These mechanisms help us sustainably manage the risks associated with lending to smallholder farmers, who are disproportionately affected by climate change. We also work with organizations that provide climate change-relevant training to the farmers we finance. Through learning about best practices for organic fertilizer application, erosion control and other environmental topics, smallholder farmers develop skills that increase their climate change resilience.  

Want to know more? Consider joining us at the 2015 Cracking the Nut conference in Lusaka, Zambia on March 2-3, 2015. We’ll be co-hosting a breakout session and participating in a plenary panel to provide more information about how we address climate change.