[{"bbox": [96, 152, 1136, 340], "category": "Text", "text": "Even though the Government of Honduras elaborated in 2015 the **National Financial Inclusion Strategy (NFIS)**, there is currently no legal and institutional framework specifically addressing the access to financing for sustainable productive practices. This lack of structure hinders small producers and family-farmers from adopting better practices, including those related to climate change mitigation and adaptation. There is an urgent need for a regulatory framework that facilitates access to credit on favorable terms, preferably through partnerships with State-owned Development Banks (SDBs). This would not only promote the adoption of more sustainable practices, but also drive increased income and agricultural production overall."}, {"bbox": [96, 364, 1136, 473], "category": "Text", "text": "Although climate variability poses challenges to production and productivity, the adoption of climate-resilient technologies and best management practices offers potential for their improvement. However, the lack of resources for investment and the absence of technical assistance limit the adoption of such technologies and best practices."}, {"bbox": [96, 496, 1136, 631], "category": "Text", "text": "**Financial institutions, such as commercial banks and financial cooperatives, hesitate to support MSMEs green transition** due to the absence of credit collateral, their limited financial knowledge, lack of established credit records, and the dispersed nature of rural areas. Private financial institutions perceive most green-agri-MSMEs as highly risky (especially those led by women), unsuitable and not sufficiently prepared to receive their financing in a profitable manner."}, {"bbox": [96, 655, 1136, 738], "category": "Text", "text": "Given that the **private financial sector is not driving the necessary investments to undertake the green transition**, the **public sector must establish the necessary incentives** to redirect technology, energy and agricultural investments towards sustainable and financially accessible and gender sensitive projects."}, {"bbox": [96, 762, 1136, 923], "category": "Text", "text": "To achieve this goal, the Action acknowledges the critical need to **create a range of inclusive and climate-smart financial products**, catering the demand for both working capital and investment needs. These products will grant MSMEs access to sustainable public finance as well as technical assistance. The overarching objective is to foster the growth of green value chains, enabling the adoption of competitive production models. Furthermore, the adoption of new gender and climate-smart technological products will support resilient producers in confronting and overcoming the vulnerability to climate change impacts on their “green” entrepreneurial endeavors."}, {"bbox": [96, 947, 1136, 1107], "category": "Text", "text": "By **providing tailored financial products and technical support services, SDBs and their network of Financial Intermediaries can empower MSMEs to invest in sustainable technologies**, improve productivity, and expand their businesses, ultimately contributing to inclusive and sustainable development in Honduras. Climate-smart financing solutions – currently unavailable in the country for a huge segment of rural small producers – could be tailored to small-scale producers in the coffee, cocoa, and staple crops chains, which have demand in the market²⁷."}, {"bbox": [96, 1132, 1136, 1322], "category": "Text", "text": "Complementary to the technical assistance, these solutions will enable them to acquire inputs, equipment, and technologies, and implement **regenerative and agroforestry agricultural models**. These financial products will empower producers to innovate by making investments in acquiring new technologies, appropriate inputs (e.g., seeds with suitable germplasm, environmentally friendly inputs, environmental certifications, and traceability on farms, etc.), and productive infrastructure (e.g., post-harvest equipment or drying with energy efficiency, compliance with environmental certifications in value-added processes and raw material transformation, and promotion of circular economy in post-harvest processes, etc.)²⁸."}, {"bbox": [96, 1345, 1136, 1480], "category": "Text", "text": "This could also imply the **development of innovative financing solutions**, such as microfinance products, mobile banking services, and alternative credit scoring mechanisms, to overcome the barriers to formal financial inclusion. Additionally, **capacity-building initiatives targeting informal MSMEs** can help improve financial literacy, business management skills, and compliance with regulatory requirements, thereby facilitating their transition to the formal economy."}, {"bbox": [85, 1554, 1145, 1602], "category": "Footnote", "text": "²⁷ Organización de las Naciones Unidas para la Alimentación y la Agricultura (FAO) (2022). Marco Estratégico Regional para la Gestión de Riesgos Climáticos en el Sector Agrícola del Corredor Seco Centroamericano, Tegucigalpa, Honduras"}, {"bbox": [85, 1599, 1145, 1649], "category": "Footnote", "text": "²⁸ Banco InterAmericano de Desarrollo (BID), (2019). Experiencias y Lecciones Aprendidas en Proyectos de Desarrollo Integral, Tegucigalpa, Honduras."}, {"bbox": [1037, 1681, 1145, 1707], "category": "Page-footer", "text": "Page 9 of 38"}]