Many landscapes in the global south are small-scale mosaics of different vegetation types and land uses, including homesteads, crop fields, forests and agroforests . They are of vital importance for local livelihoods, nature and biodiversity conservation and climate change resilience. It is in such diverse landscapes—often on farms smaller than five hectares—that nearly half of the world’s food is produced. However, these smallholder producers tend to struggle to get access finance to improve or scale up their businesses. There may be credit providers in the landscape, but they are often reluctant to provide loans to small entrepreneurs in the land use sector as it is considered risky, and pay-back periods tend to be longer than normal lending policies allow for.
The Green Finance Initiative for Small and Medium-sized Enterprises (GFS) in forestry and agro-forestry is a new initiative that aims to increase investment and enhance access to finance for responsible smallholder forest and farm producers organizations, indigenous people and local communities, and small and medium-sized enterprises in the forestry and agroforestry sectors in the global South. The main aim of the GFS Initiative is to enhance access to finance for these stakeholder groups so they can transform and maintain diversified land uses and business practices that contribute to sustainable and resilient landscapes.
Accessing finance requires that local actors and financial institutions agree on the nature and conditions of the financial arrangements between them. They need to be able to develop business cases that meet the requirements of financial service providers (FSPs), while FSPs need to be able to offer financial products that are suited to the needs and circumstances of the local stakeholders. Therefore, the GFS initiative works on both aspects, bringing FSPs and land users closer together.
The GFS initiative is supported by the National Postcode Lottery of the Netherlands. Since 1989, the Dutch Postcode Lottery has been raising funds to support organizations working for a fairer, greener world. Thanks to the Postcode Lottery’s three million participants, it has grown to become the country’s largest charity lottery, providing finance to more than one hundred non-governmental organization.