aweSOMe – Satellite Observations for Microfinance
Smallholder farmers make up a disproportionate percentage of those living below the poverty line and face dismal agricultural productivity on their land due to large impacts of climate extremes and unexpected shocks such as COVID-19.
Access to finance is a powerful tool to lower production risks and provide farmers with the adequate credit products essential to increase yields, recover from shocks, and increase financial resilience.
However, financial institutions often face high information asymmetry due to unreliable data and unfit risk models to make informed credit decisions at low cost and scale. As a result, providing loans to smallholders is not viable for microfinance institutions (MFIs) or their loans have unaffordably high interest rates.
Our climate-agri risk scores from unique field-scale satellite-based soil moisture and greenness data, and historical climate records will reduce the risk for MFIs when offering financial services to smallholders.
The climate-agri risk scores make it viable for MFIs to provide loans to smallholder farmers, unlocking financing for small-scale farming systems. This is essential in times of climate change and for the much needed financial recovery from COVID-19.
The Inspire Challenge is an initiative to challenge partners, universities, and others to use CGIAR data to create innovative pilot projects that will scale. We look for novel approaches that democratize data-driven insights to inform local, national, regional, and global policies and applications in agriculture and food security in real time; helping people–especially smallholder farmers and producers–to lead happier and healthier lives.