Agricultural Credit Project

Agricultural Credit Project

Population growth and migration from the outer to the main islands have put pressure on natural resources in the main island of Tongatapu. The traditional agricultural system of planting food crops alongside coconuts has come under increasing pressure, and productivity is falling. The inner reefs have also been overfished.

The project targeted small-scale farmers and fishers, helping them improve production and increase yields. Loans made available through the Tonga Development Bank, together with training programmes, allowed fishers to increase their fishing range and use simple, improved equipment. Farmers were able to improve production of bananas and purchase fertilizer, materials for pest and weed control and other equipment. The project also helped diversify production. For example, fish and poultry are produced locally rather than imported at a high cost.

The project benefited a significant portion of Tonga's rural population. Over a third of them borrowed under the project. It also helped strengthen the development role of the Tonga Development Bank and demonstrated that smallholders were worthy of credit, reinforcing the bank's confidence in its ability to operate a credit programme for them.

Source: IFAD