Monday, September 19, 2011

Passport Series: Lebanon: Part 3: Agricultural Borrowers

This month’s Passport Series focuses on Lebanon! Lebanon is a country with stunning mountain scenery, a beautiful Mediterranean climate, and a highly diverse population. Follow us throughout the month of September as we learn about Lebanon’s background, its microfinance sector, and Kiva’s presence within its borders.

Lebanon has both the highest level of cultivable land and the most reliable rainfall in the Arab World. The country’s potential for a booming agricultural industry has remained somewhat untapped, however, due to the decades of conflict the country has suffered. The industry accounts for only 12% of the country’s GDP and employs just 12% of the country’s workforce.1 Major crops in Lebanon include citrus fruits, olives, potatoes, grapes and apples.2

Spinach and potato fields and the beautiful Lebanese mountains - Photo Credit: Nishita

There has recently been a large regional effort to boost Lebanon’s use of its rich agricultural resources. In 2007, the UN’s Food and Agriculture Organization initiated a $3.3 million program to fuel agricultural growth in Southern Lebanon. More recently, in 2011, the European Union provided the Lebanese Ministry of Agriculture a $20 million grant to fund a four year nation-wide agricultural and rural development program. Although these official efforts to stimulate the industry are encouraging, many Lebanese farmers may not benefit from this influx of funds due to the obstacles they face when trying to access traditional financial systems. Providing microfinance services to low-income communities is one way of making sure that no one is left out as Lebanon’s agricultural industry goes through this period of enrichment.

Agricultural loans make up 13% of Kiva’s portfolio in Lebanon. Approximately 75% of these loans are disbursed to farmers and agricultural laborers for the purchase of crops, fertilizers and pesticides. The average agricultural loan size is USD 1,100.00.

One Kiva Borrower, Ali, grows oranges and peaches and has been farming for over 30 years. He has used Kiva loans for a variety of purposes, including buying fertilizer, pesticides and equipment for use in cultivating his land. Ali says the equipment has helped him increase his productivity by 30%. Ali hopes to use his next loan to purchase a tractor.

Ali on his orange and peach farm - Photo Credit: Lena Safi

Another borrower, Houssam used his $1200 Kiva loan to invest in a large plastic cover to protect his tomato plants from Lebanon’s often uncertain weather. This cover is one of four that he has; each one costs about $1500 including the iron rods to hold it in place and the water irrigation system that is used inside. Houssam is able to grow a large enough quantity of tomatoes to sell to local wholesalers. Houssam estimates about $10,000 profit for his tomato crop in a strong season.

Houssam and his tomato plants - Photo Credit: Nishita

Houssam used his Kiva loan to purchase a plastic cover for his tomato crops - Photo Credit: Nishita

Youssef, a Kiva borrower who has a farm just down the road from Houssam’s, distributes his sizeable strawberry crop to a range of wholesalers. One of his biggest customers is “Al Hallab”, a famous Lebanese sweet shop. Youssef also used his Kiva loan to buy a protective nylon cover for his crops. This cover allows him to maintain a healthy crop for 10 months out of the year. Youssef estimates his profits for his strawberry crop alone to be $3,500 per season, and his annual profit from all of his crops to be about $14,000 per year. In the future, he is looking to add cucumbers and a special type of tomato that grows in the winter to his repertoire.

Youssef among his strawberries - Photo Credit: Nishita

To find out more about agricultural Kiva Borrowers, please visit our agricultural loans page.