In this section, you may find new materials that have been published on the topic of ‘Finance for agri-value chains’, since the date of the event. We continually select major new publications and articles that add up to the policy points discussed in this briefing.
– Agricultural Value Chain Finance: a Guide For Bankers
The perceptions of serious lending risks and high costs of service delivery, among other limitations, are well-known barriers to the financing of smallholders. These barriers make it difficult and sometimes impossible for farmers to get a loan, therefore denying them a chance to grow their businesses and incomes. Clearly, traditional banking does not meet the needs of the smallholder. Experience suggests that value chain finance is arguably one of the most sustainable and effective ways of reaching smallholder farmers with the potential to benefit a significantly greater proportion of the 450 million smallholders worldwide.
– REPORT: Finance for Smallholders – 2015
NpM platform for inclusive finance, 2015
Via one of NpM’s working groups, a research has been carried out titled: “Finance for Smallholders – Opportunities for risk management by linking financial institutions and producer organisations”. The NpM Rural Finance working group focuses on improving its members’ activities to increase access to financial services in rural areas. In this light, the group decided in February 2014 to research which bottlenecks exist to finance smallholders, thereby identifying opportunities for risk management through linking financial institutions and producer organisations, in the countries Ethiopia, Mali, Rwanda and Uganda. The research has been carried out in cooperation with AgriProFocus (APF) and the Wageningen University and Research centre (Wageningen UR), and is funded by the Food & Business Knowledge Platform (F&BKP). The NpM Rural Finance working group consists of the following NpM members: Cordaid, FMO, Hivos, ICCO, ICCO Terrafina Microfinance (formerly: Terrafina Microfinance), Rabobank Foundation and Oxfam Novib. ICCO Terrafina Microfinance coordinates the working group. The report has been realised in coordination with other stakeholders who are active in this field on an international level: Agriterra, the European Microfinance Platform (e-MFP) and the Consultative Group to Assist the Poor (CGAP).
– Revolutionising Agricultural Finance: A post Fin4Ag Conference Special report
cta.int, February 2015
The Fin4Ag conference held in Nairobi, Kenya, July 2014, was the largest and most extensive event ever staged focusing specifically on agri-financing. This text provides a valuable overview of the unique event, which covered new thinking around the three broad themes of innovative tools, a new legal and regulatory framework, and cross-cutting issues in agri-value chain finance. Specific issues covered include warehouse receipt financing, the progress of African commodity exchanges and alternative sources of finance. You can download a copy of the Conference Special report here.
– Phone-packed Africa leads way in take-up of mobile banking
Mobile banking and payment operations services are booming in sub-Saharan Africa (SSA). The region is even taking a global lead in using mobile devices for such billing services, especailly as traditional bank accounts are less common on the continent, while most now own a mobile phone. Swedish telecom company Ericsson reported that mobile subscriptions in SSA weredue to surpass 635 million by the end of 2014 – a figure “predicted to rise to around 930 million by the end of 2019”. World Bank figures for 2014 also showed that while less than 29% of people aged 15 and over in SSA had a traditional bank account, around 10% of these same people had access to a mobile phone. Overall, the World Bank found 16% of sub-Saharan mobile users have used their phones for banking purposes – a figure larger than any other global region, and ripe for far wider use still.
– CTA Newsletter: Revolutionising agricultural value chain finance: a digital perspective
CTA, July 2014
For many developing countries, agriculture plays a major role in the economy with numerous cash transactions taking place throughout the farm-to-fork agriculture value chain. This paper proposes a three-step approach for replacing the cash payments made by large buyers (e.g. lead firms, cooperatives) to smallholder farmers with digital payments. By helping to transition these aggregated cash payments to digital payments, agriculture developers are well positioned to leverage digital finance on behalf of the
agricultural base of the pyramid.