Conclusions and
Recommendations
3rd Agribanks Forum
Mary Nandazi, Calvin Miller, Dorothy
Nduku & Mumbi Kimathi
The Development Mission
As shown in the FAO Right to Food Day
presentation, access to safe and nutritious food
for all is critical and increased attention on urban
and rural poor is required.
Kenya’s VP and Min. of Agriculture highlighted
increased Government’s recognition of the role of
rural farming economies and its willingness to
participate in agricultural value chains
Challenges inhibit agricultural growth; workshop
participants are challenged to focus on
solutions…particularly rural finance and value
chain financing interventions
Premises
Agriculture is important to Africa – Agriculture is
70% of Kenya’s employment and 25% of GDP
(Vice President, Kenya)
Farmers are interested becoming business
persons; a market orientation is key
The role of women is agriculture is critical and
must receive attention
The active engagement and commitment of the
private sector is required for value chain
development; interventions must include, learn
from, partner with and strengthen the private
sector’s investment in agriculture and
agribusiness and their interaction with small
farmers
Lessons and Conclusions
Huge milestones have been covered in years
evolving value chains from plantations dominated
to value chains integrating smallholders
Successful models aimed at increasing the
participation of smallholders along dynamic value
chains as highlighted by Farm Concern Intl’,
Technoserve, Actis, Kafo, ADB Ghana
Infrastructure plays a major role in agricultural
value chains, and must be addressed
The poor state of traditional markets in most
countries is still a major challenge for stable
value chains
Lessons and Conclusions
Strong SACCO Networks can play a role in financing
and empowering many smallholders for integrating
into value chains
Value chain analysis is an important part of
understanding chains and relationships and how to
best target work in them, especially for rural
farmers
A holistic approach and partnership are required to
build the capacity and services needed to integrate
small farmers into commercial value chains.
Lessons and Conclusions
Risk mitigation – is critical in value chain finance
– commodity management is central to address product
quantity, quality and weight
– commodity management (ex. ACE) for control, monitoring,
and inspection services are needed around the world
– risk mitigation begins with “knowing your client” – combining
good production practices and secure markets for clients, good
loan analysis and good value chain and market understanding
An emphasis must be given to efficiency – technical,
economic and allocation of resources
Diversification of products and niche markets is important
to reduce risk and to address opportunities
Lessons and Conclusions
Business development services are required to
make small farmers bankable and have access to
profitable value chains – many successful
facilitation models exist (ex. BDS Kenya, Farm
Concern, CEPCO, BASIX, DrumNet....)
Skill and capacity building – addressing needs of
small farmers in a collaborative and efficient
manner
Farmers have to be trained to understand
commercial agriculture, take necessary measures
to meet buyer specifications; most will be willing,
some will not
Farmers have the potential, we need to facilitate
its realization
Lessons and Conclusions
Investment resources are needed and comes
from multiple sources; successful models include:
–
–
–
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Savings: SACCOS, banks
Loans: Banks, MFIs, investment companies
Equity and venture capital: ACTIS, Technoserve
Shared risk models
Equity and quasi-equity sources are especially
important for agribusiness finance.
Intermediaries play an important role and need
to be considered when financing the supply chain
Lessons and Conclusions
Experiences from the “Middlemen”
passion fruit, processing into pulp and selling to
large buyers
Bernard Maina, aggregation and sales of tomatoes
and French beans
Financial Constraints of intermediaries brought to
light. Both working and fixed capital required
Play important role as value chain actors
Value Chain Finance
Recommendations and Issues to
Address in the Future
Commodity Management (ej. ACE) is an area for
further work –linking with programs of
smallholders through NGOs and others
Technology should be developed and shared –
expanding models such as M-Pesa and E-choupal
Skill and capacity building is required
– addressing needs of small farmers in a collaborative and
efficient manner
– addressing needs of governments, MFIs and
development agencies to learn
– cross-exchange, web exchange and interaction to learn
from each other must be pursued
Recommendations and Future Issues
A standard platform and guidelines – is important
to collaborate (with donor support) to build a
common set of standards and tools for value
chain finance, such as Microfin (for planning) and
the Microfinance Standards (for analysis) and
Microbanker (for MIS)
AFRACA, FAO and others are platforms for
collaboration and collaborative learning – a joint
effort is needed by all to grow and learn together
Recommendations and Future
Issues
Value chain finance offers an answer
to addressing agricultural and
agribusiness finance; the way
forward in perfecting and promoting
it begins with us.
Thank you!!