We operate a special program and a community of practice focused on financial cooperatives, given the importance of these entities as providers of financial services to smallholder farmers, rural MSMEs and households. We also provide technical assistance to reform and build capacity of public financial institutions and leverage Fintechs and digital platforms to advance agriculture finance. Strengthening agriculture finance markets : We provide solutions for agriculture lenders to access to long term finance, to digitize and green their services, and to manage agriculture risks, and grow agriculture asset classes. Some examples of policy and legal/regulatory intervention areas include lending quotas, interest rate caps, bank branch expansion regulations, prudential regulations impacting agricultural lending, warehouse receipt financing frameworks, agri-business receivables certificates, and alternative dispute mechanisms for contract farming. Policy and Regulatory Interventions: We conduct diagnostic studies including FSAP (Financial Sector Assessment Program) on the state of agriculture finance and produce concrete action plans to reform public policies and regulations in order to create an enabling environment to mobilize agricultural finance. Such markets provide adequate financial services along agriculture value chains from farmers to MSMEs operating in processing, commercialization, transportation of agriculture products. We assist client countries in developing and implementing agriculture finance strategies and instruments to crowd-in private capital, deepening resilient agriculture finance markets. On the other side, many countries have put in place inadequate or ineffective policies and instruments, which often limit the opportunities to mobilize private capital for the sector. Important challenges for the financial markets include managing unique risks in agriculture, high transaction costs in dealing with large number of small farmers, and micro, small and medium enterprises (MSMEs) along the agriculture value chains, limited effective demand for finance, lack of expertise of financial institutions in managing agricultural loan portfolios. Agriculture loans and investments portfolios currently are disproportionately low compared to the agriculture sector’s share of GDP. Banks, microfinance institutions, and institutional investors have traditionally been providing very limited resources for the sectors. Smaller investments are also needed for farmers and agriculture micro, small and medium enterprises to increase their productivity while reducing environment impact and taking into account climate risks.įinancial systems in most developing countries are ill prepared to finance the shift to sustainable agriculture and agri-food industries. Most of which needs to come from private sector due to the limited public resources, large scale in mechanization, climate smart technologies, processing, and agri-food logistics. Estimates suggest that the global food demand will increase by 70% by 2050 and at least $80 billion annual investments throughout the value chains will be required in response. They put tremendous pressure to shift the policy focus to the development of a more sustainable and resilient agri-food industry around the world. The accelerating pace of climate change, population growth and changing dietary preferences, global pandemic, and conflicts have threatened food security and the development of agri-food sector. Democratic Republic of Congo - Français.
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