Ethiopia’s Land Investment for Transformation (LIFT) program follows a market systems development (MSD) approach in order to maximize the impact for smallholder farms during the certification of 14 million parcels – making this land available for securing a bank loan or guarantee payment of utility or infrastructure services. Previously, the regulatory environment prevented this land to be used as collateral by smallholder farmers. LIFT collaborated with microfinance institutions to design a loan product that would use the land use right as collateral, instead of the actual land itself. If there was a case of default, the lenders would secure temporary use rights of the land until the value was recovered, or for a maximum of two years – though these were primarily technicalities that allowed LIFT to engage with regional land administration offices, securing their buy-in.
The success of this pilot project resulted in policy changes in Amhara, which allows rural smallholders to present their land certificate as a form of collateral – which has in turn put pressure on additional regions and federal land institutions to adopt similar policies and practices.
Source:
Fiestas, I. (2021) Is the MSD approach right to achieve policy change? Beam Exchange Blog.
Link: https://beamexchange.org/community/blogs/2021/2/18/msd-approach-right-achieve-policy-change/