Better Cotton, the world’s largest cotton sustainability initiative, has partnered with FS Impact Finance to launch a fund aimed at supporting smallholder farmers in the cotton sector. The Memorandum of Understanding (MoU) between the two organizations outlines plans to pilot the fund in India.
The initiative will address the financial challenges faced by smallholders, who constitute over 90 per cent of the world's cotton farmers but often struggle to access financial support due to their Farmer Producer Organisations’ (FPOs) lack of credit history. In India, only a few of the 16,000 FPOs, which represent more than 5.8 million farmers, have access to formal financial markets.
The new fund will incentivize cotton farming communities to invest in women’s empowerment and climate resilience by eliminating traditional financing barriers. It aims to support FPOs in implementing gender and climate resilience activities, improving their credit history, and enabling them to develop sustainable growth plans.
Better Cotton CEO Alan McClay highlighted that the collaboration with FS Impact Finance could significantly advance ongoing efforts in India, emphasizing the initiative’s inclusive approach. FS Impact Finance Managing Director Martin Cremer noted that the fund aims to enhance conditions for smallholder farmers and contribute to the development and professionalization of local value chains.
