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Market for Village Farmers

▬Special Projects ▬

Market for Village Farmers

CEFI and Market for Village Farmers Project have signed a Memorandum of Agreement to design new agriculture lending products which will be a trendsetter in agriculture lending and the future of Papua New Guinea. Market for Village Framers Project is executed by the Department of Agriculture and Livestock and implemented by Fresh Produce Development Authority. The project is funded by the International Fund for Agriculture Development (IFAD) and the Government of Papua New Guinea. The project aims at improving the livelihoods of village farming households in five target provinces of PNG (Western Highlands, Jiwaka, Simbu, Eastern Highlands, Morobe and East New Britain) by facilitating their transition from semi-subsistence agriculture to market oriented production and framing as a business.  

CEFI through the Special Projects Unit is responsible for training the 25,000 farming households and linking them to the financial institutions in order for them to open bank accounts and have access to loans to support the growth and expansion of their farming business.

Financial Inclusion for Fresh Produce & Galip Nut Farming Households – CEF – MVF Information Booklet

Market for Village Farmers (MVF) Overview

The project was initiated by the Department of Agriculture & Livestock (DAL) in 2013.

DAL requested IFAD to consider a soft loan funding arrangement (25 years) for a project that would contribute to improving the fresh produce value chain in PNG, similar in scope to the then PPAP partnership model for Coffee & Cocoa.

Total Project Financing – $USD 50.26 million.

Project Goal

To improve the livelihoods of village farming Households in target provinces, by facilitating their transition from semi- subsistence agriculture to market-oriented production and farming as a business

Project Objective

To achieve sustainable increased returns to village farming Households from increased marketed production.

Target Provinces

Western Highlands, Jiwaka, Eastern Highlands, Simbu, Morobe

– (Fresh Produce) & Eastern New Britain [Galip Nut).

Target Population

25,000 Farming Households .i.e about 100,000 individuals

Project Components of the MVF Project

Financial Inclusion for Fresh Produce & Galip Nut Farming Households – CEF – MVF Information Booklet

Project Components of the MVF Project

  1. Inclusive Business Partnerships

Farmers to gain improved access to markets and support services and buyers to source from farmers fresh produce to supply remunerative markets.

Focus areas | Sub-components;

  • Fresh Produce Value Chains
  • Galip Nut Value Chains
  1. Supportive Value Chain Investments

Facilitate farmers access to markets by unlocking production areas through road spot improvements & support the access of farming households and other value chain stakeholders to responsive and suitable financial services provided at an affordable cost by sustainable financial institutions

Focus areas| Sub-components;

  • Spot Improvements of feeder roads
  • Financial Inclusion
  1. Collective Governance and Project Management

Promoting a favorable policy and institutional environment to support the development of inclusive fresh produce and galip nut value chains

Focus areas|Sub-components;

  • Collective Governance
  • Project Management


CEFI’s Component of the MVF Project:

Supportive Value Chain Investments.

Financial Inclusion

CEFI will focus on implementing Sub – Component 2.2 – Financial Inclusion. MVF Project, Fresh Produce Development Authority (FPDA) and CEFI have signed a sub- project agreement (SPA) to implement financial inclusion activities.

Aim: improving access to affordable and diversified financial services for farming households and other value chain stakeholders that can unlock access to markets and services for farmers.

CEFI’s roles in the project under the Financial Inclusion are three (3) fold:

  1. Roll-ot the VFLI Training to Farming Households in the selected Provinces

Sub Component-Objective:


Ensure that the family based approach and financial education component will be perfectly harmonized into a seamless gender inclusive program aiming at raising household’s standards of living.



Trainers = 14 CEFI for each province

Total trainers = 84 Trainers for six (6) provinces

Estimate Total = 4100 farming per province

Major Activities:

  1. To develop appropriate training material and conduct Training of Trainers for targeted Farming Households
  2. To conduct Retail Trainings to the identified Farming Households
  3. Conduct Refresher Training
  4. Conduct Mentoring Sessions


  1. Partnering with Partner Financial Institutions to deliver services to the faming households using channels

Sub Component-Objectives:

To develop innovative financial products and services meeting the needs of farming households and other relevant stakeholders in the fresh produce industry


Nine (9) Financial Institutions (commercial Banks, Microbanks, Savings & Loans)


Major Activities

  • Engagement of Technical Service Provider to conduct due diligence exercise and support the partner financial institutions.
  • Identify regulated Financial Institutions who are actively participating in the provinces.
  • Conduct a survey on Agriculture Financing.
  • Build confidence and capacity on agriculture lending through training, exposure visits etc.
  • Conduct market research and design innovative market driven products for the farmers.
  • Design Risk Mitigating strategy for lending.
  • Work with the PFIs to expand their agent banking for farmers.
  • Work with PFIs to expand their agent banking outreach.
  • Open bank accounts for VFLI Trained Farmers.

CEFI will provide technical assistance to the Partner Financial Institutions (PFIs), with support from an expert consultant to design and develop innovative financial productions and services that meet the commercial and business financial needs of Market for Village Farmers Project’s target rural farming communities.

Specific Assistance to be provided to PFIs is as follows;

  1. Outreach – Based on the development plan of each financial institution, the Market for Village Farmers Project through CEFI will support any of the activities relating to the development of agent networks covering the target provinces, development of point services specifically adapted to people with low degree of literacy and further development of mobile phone applications that will ease access to
  2. Products and services – CEFI will support financial institutions in developing innovative products and services that cater to the needs of the target farming households through a) product design and b) training of potential beneficiaries of financial institution’s staff (as well as the adoption of the selected financial institution’s MIS and accounting system).
  • Capacity building – CEFI through the project will build the capacity of financial institution’s staff through the provision of various training courses focusing on financing rural and agriculture-related activities, risk and project assessment and management, project monitoring and control.

Financial Institution who are interested to partner with CEFI and PMU in this endeavor will be accorded the following support:

  • Support for extending the banking services network to target project provinces through new agencies
  • Provide capacity development for staff on agriculture lending credit assessment, design repayment based on actual cash flows, delinquency management and risk mitigation strategies
  • Exposure visits to successful countries / country to learn about their experience in developing financial services and products for market oriented agriculture
  • Membership to international agriculture lending networks such as Asia-Pacific Rural and Agriculture Credit Association (APRACA)
  • Technical Assistance (TA) from reputable international firm with excellent track record of assisting banks in agri-business to design market drive innovative agriculture lending products
  • Support performance related incentives
  1. Risk Sharing Facility (RSF) – Market for Village Farmers Project

BPNG RSF will cover all agriculture lending products under the MVF arranements with CEFI and the partner institutions. The Small Scale Agriculture Lending guarantee product which has the following features will be offered under the MVF Project.

-Maximum Loan Amount: K20,000.

-Minimum collateral top loan ratio: Not required

-Maximum Loan Term: 36 months

-Premium Pricing Poilcy Normal Rates: 0.5%

The premiums of this product will be subsidized by CEFI on behalf of the MVF Project.

The product has already been presented to all partner financial institutions in the presence of CEFI and PMU. The PFIs have been advised that the premium will be covered by CEFI till the end of the MVF project (end of 2024).