Objective of the project
Develop products and services to sustainably finance agriculture

Areas of intervention
Laos, Benin, Burkina Faso, Togo, Democratic Republic of Congo

Project manager

Partners
Food and Agriculture Organization of the United Nations - FAO

Some key figures

8 partner MFIs

Solutions for sustainable agricultural financing

Finance agricole

Agriculture: a vital sector lacking specialised financing

Agriculture is the main economic activity that meets the world population’s demand for food. According to the United Nations, this sector is the world’s main employer. It is currently the source of earnings for 40% of the world’s population, and the main source of revenue and provider of employment for poor households in rural areas.
Despite the important role agriculture plays in feeding the world, 500 million small farming enterprises that supply around 80% of the food consumed in developing countries still lack crucial financing mechanisms that are adapted to their activity.

Formal financial institutions are still considerably limited in providing financial services to households dependent on agriculture, as well as in the agribusiness sector. This leads to a rural financing gap limiting agricultural investment and significantly affecting smallholders and their organizations, as well as small and medium-sized agricultural enterprises. All three constitute the so-called "missing middle" in financial markets, and suffer from very limited access to financing.

As part of its mission, ADA has identified a strong need to support MFIs to develop products and / or services for financing agriculture.

Key steps to financially support agricultural value chain actors:

  • Developing tailor-made products for inhabitants of rural areas
  • Developing specifically targeted training courses in agricultural financial management
  • Taking into account all of the value chain’s actors is key to success
  • Applying theory to fieldwork: our coaching service

Implementation of tailor-made training

Considering these elements, ADA's Technical Support Unit for MFIs wanted to integrate a technical support offer in agricultural finance, by integrating a coaching component to encourage stronger involvement of the MFI's management and ownership of the project.

In addition, training in agricultural finance based on content created by FAO (and co-facilitated in 2015 by FAO and ADA in French-speaking Africa) was very positively received. At the global level, the microfinance sector is showing recognition of the potential of the agricultural financial market.

In 2017, initial training was held with about twenty participants, most of whom applied for the coaching project: 5 MFIs and 5 coaches were selected and paired during the planning workshop.

 


 

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