TITLE: Accessing Finance for Agricultural Development: Smallholders and Agri-SMEs DATE: 21 November 2023, 2-4pm
VENUE: African Agri Investment Indaba, Cape Town International Convention Centre 2, Cape Town
Smallholder farmers and agricultural SMEs are the foundation of Africa’s food systems. An estimated 70% of food crops are grown on family farms, while small agricultural businesses provide essential services throughout the food supply chain including inputs, financing, processing, and market channels. Despite their important role, small-scale farmers and agri-SMEs are not able to grow and improve their enterprises due to lack of accessible financing. Formal financing channels are currently providing around 17% of the estimated demand from agri-SMEs, leaving a gap of US$ 75 billion. While this situation presents a significant challenge, it is also a potential opportunity to rethink what it takes to make the finance ecosystem function better for all.
This session will showcase innovative financing solutions that forward-looking investors and support organizations are deploying, testing, and adopting to improve access to finance for smallholders and agri-SMEs. It will explore the challenges in mainstreaming alternative approaches, and in developing sufficient bankable pipeline.
After an engaging panel discussion, participating investors will be able to assess the business ideas of several agri-food SMEs in a matchmaking investment-pitch round.
To share innovative solutions to improving agri-SME finance.
To understand the obstacles that prevent additional investment to the sector.
To connect high potential SMEs with interested investors.
To engage diverse stakeholders to effectively support the agri-SME ecosystem.
The event will result in better public understanding of the interconnected issues that impact agricultural enterprises and their ability to access financing. It will reinforce the role that SMEs play in Africa’s agri-food systems promote innovators as essential contributors to the solutions needed.
14:00 – 14:15 Moderator opening - welcomes participants, introduces panellists and reviews session agenda. 14:15 - 14:45 Segment 1: Panel discussion How to better integrate supply and demand strategies to improve access to finance for agri-SMEs? Moderator – Ms. Nadia Martinez, Senior Coordinator, SAFIN Key points of discussion:
You’re all here because of your work trying to innovate in a complex and challenging space. Let’s start by telling us more about your financing solutions.
IFAD’s private sector financing program – targeting small ticket sizes, using financial lending/equity to strengthen financial markets and institutions by enabling MFI capacity to invest in SHF and SMEs. Also financing SMEs directly.
Aceli Africa – targeting local financial institutions through incentives, first loss mechanisms and combining that with TA (for financial sector as well as the SME clients)
GIZ – targeting capacity development of agri-SMEs through technical assistance and BDS provision for investment readiness.
All: One important issue that this field faces is that everyone seems to be working in a fragmented and siloed way that limits the ability to scale some of these successful models. What do you think can be done about this and can you provide an example of how you see your own solution being applied at sector level?
Aceli: You’re working primarily in Africa where the financing gap is wider, and the financing needs of agricultural enterprises being met through formal channels is lowest when compared with other regions. Do you think there are specific opportunities in Africa that investors are not always so clear about?
IFAD: As an international financial institution working mainly through governments, how can private sector be engaged more meaningfully and strategically to advance the objectives of increasing finance?
Turning to technical assistance, GIZ has been instrumental in helping to develop the market for inclusive and affordable advisory services to build the capacities of MSME including farmers, cooperatives and processors. What have you learned from these efforts that could inform the design of TA projects by others?
IFAD and Aceli: you’re also offering technical assistance alongside providing investment. How do you know what TA is needed and if it’s working?
All: In a collaboration with several partners, SAFIN research has pointed to the need to better segment SMEs, to increase cost recovery to make advisory businesses feasible and to standardize performance indicators, can any of you share experiences in this regard?
Finally, advise to entrepreneurs trying to get that much needed investment. What is within their control that will improve their possibilities?
14:45 – 15:00 Q&A 15:00 – 16:00 Segment 2: SME Pitches
Nadia Martinez, Senior Coordinator, Smallholder and Agri-SME Finance and Investment Network (SAFIN)
Nadia leads the Smallholder and Agri-SME Finance and Investment Network (SAFIN) at IFAD. She is a development leader with 20 years of experience working with global public and private institutions in the agricultural finance sector. Nadia has worked extensively with small scale farmers and agri-SMEs, and through various roles, has advised companies, lending institutions, trade associations, NGOs and Government agencies in the USA, sub-Saharan Africa, and Latin America and the Caribbean.
Andrew Ahiaku, Head of Financial Sector, Aceli Africa
Andrew is a food and agricultural finance specialist, passionate about inclusive agriculture and access to finance. He previously spent 13 years with Fidelity and Barclays (Absa) Banks in Ghana where he gained experience in corporate & SME banking covering finance lease, relationship management, business development, credit risk, and agricultural lending. He leads Aceli Africa’s engagement with commercial banks to increase their lending to agricultural SMEs and supervises capacity building for both SMEs and lenders.
Nina Hollemann, Advisor Agricultural Finance, GIZ
Nina provides strategic advisory services in agricultural finance and value chain development at GIZ. Her portfolio includes financial inclusion, gender and capacity development concepts for farmers and SMEs in agricultural value chains. She previously worked in Nepal and Cameroon developing and implementing agricultural value chains projects, promoting agricultural finance, and supporting farmer’s organizations with a strong focus of capacity development of farmers and SMEs.
Francisco Marques, Technical Specialist - Private Sector, International Fund for Agricultural Development
Francisco has 13 years of experience in commodity and structured finance with commercial banks and development financial institutions. Currently, he is a technical specialist at IFAD where he develops and manages non-sovereign operations in the Private Sector Advisory and Implementation Unit (PAI). Previously, he worked at the African Development Bank as Senior Investment Officer within the Financial Intermediation and Inclusion Division.
For more information about the African Agri Investment Indaba or to register tgo attend: http:///www.agri-indaba.com/register