PRODUCTION CREDIT FOR AFRICAN SMALL-HOLDERS: CONDITIONS FOR PRIVATE PROVISION / DU CRÉDIT POUR LES PAYSANS AFRICAINS: QU'EST-CE QU'IL FAUT POUR QUE LE SECTEUR PRIVÉ LE FOURNISSE?

It was hoped that market reforms in sub-Saharan Africa would unleash the private sector, such that farmers would benefit from access to new markets and dynamic pri vately provided services. The reality is that commercial activity has been highly selec tive and often disappointing. Many farmers face a deterioration in market access and services, including credit. This paper examines the conditions for private sector provi sion of production credit for smallholders. Drawing on recent field work in Uganda and Zimbabwe, it analyses the performance of two contrasting approaches to small holder credit. These schemes have coverage far in excess of any other formal sector source of credit for smallholders (300,000 and 53,000 farmers respectively). The Zim babwean scheme is an apparently commercially sustainable text book model of how to run such a scheme. The Ugandan scheme is paternalistic, institutionally complica ted and subject to significant inefficiencies in its operation, but nonetheless a poten tially significant improvement on the "without scheme" scenario. Of note also is the scale of coverage, and its strong poverty focus. The paper concludes with a discus sion of generic lessons for other credit schemes and commodities.