Few lenders consider small agricultural producers to be attractive borrowers - and not without reason. Farmer cooperatives and small and medium-sized enterprises (SMEs) often lack sufficient collateral. Moreover, lenders consider agriculture to be particularly risky; farms are often located in remote areas, crops are vulnerable to pests and unpredictable weather, and prices are susceptible to rapid changes. Furthermore, smallholder farmers and cooperative management often lack strong business and financial management skills, making it difficult for them to apply for and manage a loan. These risks can turn even a short-term loan into a bad investment.To help address these challenges, the Rainforest Alliance launched its Sustainable Finance Initiative, which helps farmers and SMEs access different types of loans.
