finance

This briefing note by the The Initiative for Smallholder Finance, details how philanthropic investment can play an influential role in mitigating foreign exchange risk. The note emerged from conversations with stakeholders at various levels of the agricultural value chain who expressed concerns about managing the foreign exchange (FX) exposure in their businesses – traders who pre-finance farmers and financiers who lend to smallholders and agri-businesses, among others. »

This report by the Rural and Agricultural Finance Learning Lab and the Initiative for Smallholder Finance captures the way the smallholder finance space currently operates by describing the key actors and the nature of their interactions, and by conceptualizing these in a new “industry model.” The report identifies market frictions across the major components of the “industry model” that continue to inhibit smallholder farmers’ access to financial services and opportunities for removing them, and rallies sector actors around the need for more collective action than ever before. »

This chapter “Innovative and inclusive finance for youth in agriculture”, was contributed by CTA as part of the 2015 Africa Agriculture Status Report. This chapter focused on analysing youth access to credit, savings, insurance or other forms of financing to promote their entrepreneurship drive. It starts with a brief review of the challenges preventing young agripreneurs from accessing needed finance. It went further to assess the current state of financing available to youth in agriculture, observing that financing youth in agriculture is already happening. Authors summarized their analyses and recommendations into five key points. »

This guide (PDF), developed by AgriFin (World Bank Group), in partnership with Bankaool (Mexico), HBL Bank (Pakistan) and HDFC Bank (India), provides a practical, evidence-based guidance to financial institutions engaging in agricultural value chain finance (AVCF). It includes a comprehensive picture of agricultural value chains to enable financial institutions to adapt financial products to the specific demands of value chain actors; and examples of field-tested AVCF products and procedures that have shown value or promise for financial institutions. »

This briefing note by the Initiative for Smallholder Finance explores how innovative lenders are using new data sources and analytics to assess the creditworthiness of borrowers. It seeks to supplement the growing body of literature on alternative applications of data in assessing credit risk with a discussion of the opportunity to extend these models to the agriculture sector. »

This brief paper explores the opportunities for African banks in financing intra-African food trade, in particular using value chain financing mechanisms (also called structured financing techniques). Value chain financing is used widely in the continent’s agricultural trade, but mostly for exports to and imports from other parts of the world, not for intra-African trade. And most such value chain financing transactions are managed by international banks, with African banks having at best a supporting role. »