Description financing model: Direct Farmer Financing (Market):

Direct Farmer Financing (Market) involves pioneering banks providing loans directly to farmers, supported by catalytic capital through de-risking instruments or financial incentives to improve loan affordability and uptake

Applicability: Applicable to broad range of farmers and agri-SMEs that meet defined eligibility criteria

Considerations: Scalability depends on the availability of catalytic capital

Description of de-risking tool(s):

N/A

Case study description: 

The product is part of a broader set of Itaú BBA’s ESG Agro products, designed jointly with Imaflora (Brazilian NGO), offering incentives to stimulate low-carbon agricultural practices, such as cover cropping and no-till farming

1.Itaú BBA offers farmers loans with better than market interest rates on the condition that farmers plant a cover crop during the off-season & adopt no-till farming

2.Farmers use these loans to finance their annual crop production costs

3.Monitoring is carried out by an external MRV provider using satellite images assessing offseason cover crops adoption

So far, €127M has been disbursed through the program, benefiting 14,126 ha of farming land (April ’24)