Business Session 4
13 November 2019 (09:00 – 10:45)
Taj Palace Hotel, New Delhi, India
Session Theme : Agricultural Value Chain Finance Innovations and Lessons : Case Studies in Africa
Session Organizer : African Rural and Agricultural Credit Association (AFRACA), Nairobi, Kenya
Promotion of agribusiness in Africa has tremendous potential to enhance its export competitiveness and meet the global demand for high quality products, convenience, environmental safety, and traceability. This is possible through developing agricultural value chains (AVC) and include the smallholder producers as a part of the chain. Development of AVCs will also contribute to improving growth and reducing poverty by creating economic opportunities in Africa. Agricultural value chain finance (AVCF), which promotes specialization and enhances productivity and investments and the application of modern technology, also supports the increasing transformation and commercialization of agriculture that underlies the sector’s sustainability in Africa. Another important benefit of AVCF is that it promotes financial inclusion. In particular, it offers an opportunity to expand the financing space for agriculture by improving efficiency, ensuring repayments, and consolidating linkages among participants in the value chain.
AVCF is an approach that has the potential to revitalize agricultural finance system in Africa and could be efficiently used by the financial institutions and those organizations actively participating or involved in promoting and developing value chains to bring efficiency in agricultural systems. The financial instruments used in AVCF can help meet the growing need for agricultural finance and investment in response to consumer demand for more processed or value-added products. The strategy for developing or strengthening value chains depends on the business models being followed which includes the drivers, processes and resources of the entire value chain system, even if the system is composed of multiple enterprises. There is also not only one model for financing the value chain, and Africa’s AVCs can benefit from the experiences from other countries who implemented business models of AVCF. Many African agribusinesses are based on within-the-chain financing (provided mainly by the initiator or driver of the AVC) and are limited by the availability of this financing source. From a development perspective, national governments and support agencies need to ensure that the financial systems in their countries are able to meet the financial demands arising from the growth of modern agricultural and food value chains.
The Business Session 4 (BS4) will premise around its most recent work with the FAO/CABFIN partnership that resulted to the publication on ‘Agricultural Value Chain Finance Innovations and Lessons: Case Studies in Africa’ by Calvin Miller. The case studies provide lessons on the successes and challenges of a variety of agricultural value chain models and financing tools within the African context with major contributions from AFRACA member institutions and partners. The overall objective of the session is to showcase how different actors can support financing or financing instruments across different AGVC’s. The publication is intended for learnings, discussions and to inform the stakeholders on how to adapt and innovate in their own contexts and where to go to learn more. The session detail is appended below:
Business Session 4 (Code BS 4)
Session Theme: Agricultural Value Chain Finance Innovations and Lessons: Case Studies in Africa
(Session hosted and organized by AFRACA, Nairobi, Kenya)