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)
- ACFB (Benin)
- ACFIME (Burkina Faso)
- GRAINE-SARL (Burkina Faso)
- FUCEC (Togo)
- PAIDEK SA (Democratic Republic of Congo)

Agricultural finance


ADA has set up a coaching support project in agricultural finance, which consists in accompanying MFIs in the design of agricultural finance services.


Finance-agricole


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 trainings

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.


Coaching support project in agricultural finance

Due to their size and proximity to their customers, MFIs are well acquainted with the rural population and its particularities. Whilst some of them have been able to develop products adapted to the local needs of the farmers, others continue to struggle to offer services responding specifically to these demands, both because of a lack of knowledge and know-how and also due to the risks involved in doing so.
That is why ADA implemented a coaching support project in agricultural finance in 2017 aimed at supporting MFIs in the design of agricultural finance services which respond to the needs expressed by their customers. The project was developed in two stages.


Stage 1: providing knowledge

ADA considers training to be a key factor in the empowerment process of its partner institutions in the field. The coaching support project therefore started with a training workshop on agricultural finance, which was based on modules initially developed by the FAO and adapted by ADA to the context of French-speaking sub-Saharan Africa. The training was held in Abidjan from 7 to 11 August 2017 and was attended by 18 volunteer participants from 15 different MFIs from Benin, Burkina Faso, Côte d’Ivoire, Togo and the Democratic Republic of the Congo.

Atelier Abidjan

Over the course of five days, the training session provided the participants with the theoretical knowledge required to design, develop and market agricultural finance products in an innovative and profitable way, but also limiting the risks. The challenge is not only to master the process of developing the product, but also to establish strategic alliances with the different stakeholders involved throughout the product’s value chain, so as to be able to share out the risk among the various actors.

The theoretical work was further enriched by the exchange and sharing of experiences amongst the participants.


Stage 2: definition of an action plan

At the end of the first training course, the institutions involved were invited to apply to the one-year coaching support project, renewable at the end of the first year.   

In this project, all of the coaches are experts in agricultural finance in the sub-region who were especially selected and made aware of the coaching methodology by a professional coach who provided them with support during a planning workshop and also provided them with remote support”, adds Léa Merino, the project coordinator for ADA. “The coaching enables the managers of the MFIs to benefit from the support of someone from outside the institution who listens to them, questions what they are doing, helps them to take a step back and to identify the avenues they had not thought of. This also provides them with an opportunity to take an overall look at their current strategy and to identify some areas for improvement. The coach is not there to tell the managers what they should be doing or to do their job for them.

With the support of their coaching expert in agricultural finance, each MFI is required to design an action plan to meet the objectives it has itself set. ADA is making available a fund of up to 30,000 EUR to support the MFI in the implementation of this plan, which should enable it to co-finance certain activities included in the plan.

Of the 15 MFIs which took part in the training in Abidjan, 13 applied to the coaching support project and five were chosen by ADA to benefit from this support: ACFB in Benin, ACFIME and GRAINE-SARL in Burkina Faso, FUCEC in Togo and PAIDEK SA in the Democratic Republic of the Congo.

The managing directors of the five selected MFIs, together with their operations manager or assistant manager, attended a planning workshop in Lomé at the end of September 2017. The aim of this workshop was to introduce the coaching concept and methodology to enable these managers to put forward a preliminary version of their action plans thanks to the support of their dedicated coach.  


First results: approval of the action plan and launching of the activities 

The action plans of these institutions received a final approval at the beginning of December 2017 by the ADA and FAO teams and the first actions started in the institutions during the last quarter of 2017. The five partners will be able to implement their action plans during 2018.


In 2018 the coaching support in agricultural finance project will be carried out in Southeast Asia

In parallel to the project launched in Africa, a second project was developed in Laos with three MFIs. The aim is exactly the same, namely to provide support to the management of the MFIs through local coaches and a technical assistance fund to develop or to improve financial products aimed at farmers.

 

Gauthier Malnoury


An ADA coach testifies

Gauthier Malnoury is an agroeconomist by training and project manager at ADA since 2016. He was trained in the coaching approach by Gilles Ossona de Mendez, a professional coach in Luxembourg. This allowed Gauthier to support FUCEC (Microfinance Institution in Togo) in its process of designing agricultural financing products, as part of a project set up by ADA in early 2017. He tells us his vision of the coaching approach as he saw it during his experience in Togo.
 

What is your vision of the role of coach?
In my opinion, the coach must guide the coachee and help him "give birth" to his ideas, structure them, help him to stay on track, sometimes to synthesize, clarify, etc. On the other hand, the coach must take care not to impose his way of doing things, and not to make the problem of the coachee his own! He must keep in mind that the coachee must be an actor of change and get involved in the process.
Thus, the coach must be more focused on the framework and structure his ideas, working on the relationship with the coachee. Once the framework is well defined and mastered, the coachee can evolve and focus on the content. As for me, the coaching approach brings an additional string to the technical expert's bow, since it allows "tailor-made" support, adapted to the level of the operational and strategic development of the institution.


According to you, in what state of mind should be the coach towards his "pupils"?

Gauthier Malnoury

Being a coach implies questioning this tendency that we all have to absolutely want to give ready-made solutions. This reflex, conditioned by our training and past professional experiences, is not always easy to control. The feedbacks I have got from the professional coach allowed me to become aware of it and thus readjust my coaching position in the moments when I drifted away to the consultant mode. Using the techniques learned (meta communication, synchronization, etc.), I was able to reorient the discussion and refocus the coachee into the heart of the reflection.
I also realized that the coach had to be and remain convinced throughout the process that:
- the coachee has the solutions in him but he is not necessarily aware of it;
- the coachee has the potential to improve;
- the quality of the coach-coached relationship allows the coachee to reveal his potential and find the most adapted and sustainable solutions.


Would you say that it is an asset or a threat to have expertise in agricultural finance?
Having knowledge in agricultural finance allowed me to establish a relationship of trust between the coachee and I.
When the coachee describes the "real" (the context in which his challenge is to be taken), knowing the theme allows the coach to master the technical vocabulary, avoiding him to clarify the content. The coach can quickly begin to challenge the coachee with a set of questions to allow him to formulate his needs.

Gauthier MalnouryI also realized that the coachee was not always aware of the other agricultural finance initiatives implemented in other countries, even in the sub-region (warrantage in Burkina Faso, input savings plan in Burkina Faso, Mali, etc.). I used my experience in agricultural finance to inspire the coachee, based on concrete cases that I had observed in the past, without influencing him.
Once again, the objective is to bring out the ideas of the coachee who knows better the needs of the institution than the coach, in order to identify "tailor-made" solutions.


Do you think that the posture has an impact on the reaction of the coachees?

Gauthier Malnoury

Yes, I was surprised by the impact of the posture and the spatial arrangement (on both sides of a table, sitting next to each other, etc.) on the dynamics of exchanges, which lasted several hours. Often, I willingly changed my place by explaining to the coachee why I was doing this, making sure that it does not cause him any problem.

I also learned to better synchronize with him and better control the balance between control of trade and autonomy. It is important, in my opinion, to reach and maintain a healthy situation ("we are together") so that one or the other does not feel in a lower or higher position than the other.


Are there any particular techniques that can put the coachee in confidence?
The first day of exchanges, I tended to suggest too much and not leave enough time and space for the coachee to answer and reflect. He retreated little by little, that's when I realized that I monopolized speech too much. It is important to leave silences to allow time for reflection.
The techniques of reformulation of the preconceived answers of the coachee that I used allowed him to concentrate and to deepen certain points.
A climate of trust quickly developed between us. So I had more opportunities to explain to him why I was asking seemingly confusing questions and why I changed places so often. This technique has been very effective in maintaining the alliance and avoiding misunderstandings.


News
June 2017

Agricultural finance training workshop in Abidjan, 7-11 August 2017

  • Benefit from FAO and ADA's expertise in agricultural finance
  • To strengthen its capacities through the exchange of experiences between participants
  • Have the opportunity to apply for a coaching project of a minimum of one year

Training Description

The growth of agricultural markets worldwide, particularly in developing countries, is indisputable. Many actors involved in these growing agricultural markets, including rural households and smallholder farmers, need a variety of financial services to enable them to seize economic opportunities. This global trend makes the agricultural sector increasingly attractive to financial institutions.

This training presents the opportunities and challenges of agricultural financing in the West and Central African context. An introduction to the assessment of key markets and product design principles and tools will also be presented.

  • Estimate the demand for financing products related to agricultural value chains;
  • Identify and implement best practices in the design and distribution of financial products targeted to the needs of the targeted clientele;
  • Identify the various possible strategies for risk management and distribution of these products.

Group work and case study analysis will enrich the training.

These studies are based on the experience of financial institutions that have successfully increased their agricultural portfolios in an innovative, profitable and risk mitigating manner. Potential avenues for collaboration between the public and private sectors in the development of agricultural finance products will also be discussed.

For more information, see detailed information at the bottom of this page.

If you are interested, do not delay, complete the application form at the bottom of the page and send it to the following e-mail address:

Feel free to contact us at for more information!

Discover the results of the workshop

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