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Addressing Climate Change with Microfinance Plus: Experiences in Cattle and Coffee Regions of Nicaragua

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Emerging Challenges and Innovations in Microfinance and Financial Inclusion

Abstract

This chapter reflects on a possible role for microfinance in the complex challenges posed by climate change, both in terms of adaptation and mitigation. The analysis is based on lessons from recent ‘green Microfinance Plus’ experiences of the Fondo de Desarrollo Local (FDL) and the institute Nitlapan-UCA (Universidad Centroamericana) in rural cattle and coffee regions of Nicaragua. From these experiences, we aim to develop a framework to inform (evolving) strategies and policies of microfinance institutions in the face of climate change adaptation and mitigation in rural-agricultural settings. We thereby try to avoid the trap of panacea-thinking and position microfinance interventions as taking part in complex context-specific institutional bricolage, highlighting the importance and inevitability of their local embeddedness.

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Notes

  1. 1.

    Concept taken from Bierschenk and Olivier de Sardan (1998, p. 240), defined as “a place of concrete confrontation between social actors interacting on common issues”. The concept underlines that bargaining processes do not only take place within ‘political’ bodies, like parliaments or village councils, but in every ‘real’ meeting place of actors around resources or opportunities.

  2. 2.

    This resonates with the well-known finding that ‘microcredit alone’ is not a panacea for poverty reduction and that attributing impact is difficult due to complex interactions with mediating processes (Garikipati, Johnson, & Guérin, 2017).

  3. 3.

    Although specialised studies (Van Rikxoort & Schroth, 2014) indicate differences between different types of coffee production systems in terms of their contribution to carbon capture—with a clear advantage for more diversified, dense peasant systems over monocropping coffee plantations—this is not very present in the current debate on the ground.

  4. 4.

    The alternative strategy, often promoted in the Fair Trade cooperative movement, is to build upon differentiated ‘specialty’ coffee with social, ecological or other attributes. This strategy is less focused on increasing yield and aims to increase value added per unit of coffee produced.

  5. 5.

    FDL categorises its clients on the base of their estimated total capital: campesino de subsistencia (subsistence peasant), campesino finquero (peasant farmer), finquero (capitalised farmer) (Romero et al., 2016).

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Authors and Affiliations

  1. Institute of Development Policy (IOB), University of Antwerp, Antwerp, Belgium

    Johan Bastiaensen, Milagros Romero & Frédéric Huybrechs

  2. Institute of Research and Development Nitlapan, Universidad Centroamericana (UCA), Managua, Nicaragua

    Johan Bastiaensen & Milagros Romero

Authors
  1. Johan Bastiaensen
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  2. Milagros Romero
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  3. Frédéric Huybrechs
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Correspondence to Johan Bastiaensen .

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Editors and Affiliations

  1. Portsmouth Business School, University of Portsmouth, Portsmouth, UK

    Michael O'Connor

  2. Portsmouth Business School, University of Portsmouth, Portsmouth, UK

    Joana Silva Afonso

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Bastiaensen, J., Romero, M., Huybrechs, F. (2019). Addressing Climate Change with Microfinance Plus: Experiences in Cattle and Coffee Regions of Nicaragua. In: O'Connor, M., Silva Afonso, J. (eds) Emerging Challenges and Innovations in Microfinance and Financial Inclusion . Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-05261-4_2

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  • DOI: https://doi.org/10.1007/978-3-030-05261-4_2

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