AZMJ

AZMJ

Welcome to AZMJ

AZMJ is a small, women-owned, international development consulting firm with a mission to provide high quality global consulting services and investments in support of financial service and enterprise development. We are committed to providing integrated financial services which will make a positive impact. Please take a look around and email us at info@azmj.org with any questions.

-Anita Campion
President

Financing Agricultural Value Chains in Central America

In collaboration with the Inter-American Development Bank, AZMJ recently authored a paper on Financing Agricultural Value Chains in Central America.

Agricultural value chain financing (VCF) is an emerging phenomenon in the region but it is not well studied. Historically, small- and medium-sized famers experience problems accessing formal finance. Participation in a well-structured and dynamic supply chain seems to improve chances of obtaining financing, either directly from larger more liquid agents in the same chain or indirectly from external formal lenders based on the type of relationships and degrees of connectedness in the chain (advance sale contracts, technical assistance agreements, length of transaction history, etc.). Four value chains were studied in Nicaragua (diary and plantains) and Honduras (plantains and horticulture, sweet peppers and tomatoes specifically) to discover how and under what terms and conditions financing was being provided and to understand the challenges in expanding the use of this type of financing. The main findings are (i) VCF is occurring in Nicaragua and Honduras, but it is mostly indirect; (ii) the specific instruments used to support VCF are simple—lead firm vouching for and even providing guarantees for smaller actors, relying on donor financed guarantee funds, and buyer/exporter finance; (iii) creditor rights are weak in both countries; (iv) financial institutions that are participating in VCF are not lowering interest rates despite fewer risks faced; (v) the legacy of inappropriate government interventions, namely debt forgiveness programs, and generally weak support services for producers dampens the enthusiasm of formal financial intermediaries to expand agricultural lending; and (vi) high quality technical assistance is serving as an accelerant and facilitating VCF, but it is donor financed and it is important to find ways to sustain this intervention over time.

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Interest Rates and Implications for Microfinance in Latin America and the Caribbean

Microfinance institutions (MFIs) have been successful in providing credit to millions of low-income borrowers in groups previously excluded from formal financial services, but they often charge interest rates that many claim are excessive. We examine microfinance interest rates and their determinants in order to understand how these rates might be lowered. Using high-quality financial data from 29 institutions in seven countries over a period of four years, and drawing on information from field visits with clients, we explore patterns of cost and efficiency in MFIs. We find that improved operational efficiency comes with increased competition and institutional age, or learning by doing. Encouragingly, our regression analysis shows patterns of profit-making MFIs charging lower interest rates. We also find that interest rate caps reduce the outreach of these institutions to the poor, women, and rural clients.

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News and Events

May 11, 2010 - Anita Campion visited Springfield, Missouri to work with the Professional Massage Training Center to create a microfinance-inspired system to fill in the gap left by Sallie Mae.
May 1, 2010 - Rashmi Ekka visited Paris, France to attend a meeting for the CGAP Funder Survey 2010 project.
April 2010 - Orlando Lanuza visited Honduras to conduct a study on the design and implementation of ACDI/VOCA’s Farmers Access to Credit to extract lessons learned and make suggestions for future, similar programs
March 2010 - Rashmi Ekka visited Casablanca, Morocco to conduct a training of trainers on Building Analytical Skills for Microfinance Decision Making.
February 22, 2010 - Anita Campion presented the findings of the Value Chain Finance study based in Nicaragua and Honduras at the Financiamiento de las Cadenas Agricolas de Valorseminario, San Jose, Costa Rica.
February 16, 2010 - Anita Campion and Jeremy Coon presented the findings of a Value Chain Finance study in Nicaragua and Honduras at the Inter-American Development Bank.
January 30 - February 5, 2010 - Anita Campion visited Egypt to give a social performance management training to over 20 MFIs from 10 MENA countries.
January 26, 2010 - Anita Campion and Rashmi Ekka presented the findings of a microfinance interest rate study at the Inter-American Development Bank.