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Background: A holistic review of innovations in AgriFinance.

The world’s population is expected to increase by one billion people within the next decade. The rising population is posing significant implications, among them food security, and hence makes agriculture more important than ever. It’s estimated that the demand for food will increase by 70% by 2050.

 

To address this growing demand, more investments, innovations, and financing options are necessary in order to improve inputs, acquire better on-farm practices, and improve the quality of products, and add value to the crops produced via processing. As the effects of climate change grow, agribusinesses will require more investment in sustainable production systems and climate adaptation technologies.

 

Demand for finance in agriculture varies from short-term trade finance to long-term debt and equity investment. Farmers and agrobusinesses need a range of capital to succeed which includes, among others, short-term working capital that farmers use to purchase farm inputs on a seasonal basis or that agribusinesses use to purchase raw materials from farmers or to operate a leased agro-processing facility. 

 

These create opportunities for different types of financial intermediaries and providers of capital to develop innovative products and to play various roles in addressing the financial needs in the agriculture sector. The renewed interests in the agricultural business from various stakeholders are leading to many interesting innovations in agricultural finance. 

 

Community of Practice

The SME Finance Forum is convening a group of agrifinance experts and practitioners from member and non-member institutions in order to discuss and document recent innovations in agrifinance. This will lead to creating a community of practice on agrifinance with an objective of promoting learning and sharing of good practice examples that help members improve their services to agri-SMEs. The deep-dive workshop session will cover different aspects, among them:

 

Tentative Agenda

Topic: How to scale up AgriFinance to serve more farmers, particularly towards the bottom of the pyramid?