aga 2012__ breakout group 1 summary

7/29/2019 AGA 2012__ Breakout group 1 summary

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Breakou t Grou p 1 :Finance fo r f ood new cond i t i ons,n e w o p t i o n s?


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Chair: Hanns Martin Hagen

Presenters: Stefan Schmitz (BMZ),Rabo Bank, GIZ /KfW


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The Grou p s m a in f ind in gs andr e c o m m e n d a t i o n s

1. 500 million smallholder households and manycommercial SME farmers are widely underservedby commercial banks.

2. Like farming, building strong agri finance

institutions requires c o m m i t m e n t , i n ve s t m e n tand a l o n g - t e rm p e rsp e ct i ve.

3. Each market, each sector, each farmer segment isdifferent. Local knowledge and partnership is

critical for success.4. Value chain approach should be central to finance.

5. Governments/bank regulators, NGOs, donoragencies need to work together to create a

supportive framework.


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W hat changes or i n i t i a t i ves cou ldm em b er i n st i t u t i o n s t a k e f or w a r d in

f o o d p ro d u c t i o n , f a rm e rs a n d m a rke t s?

1. Respond to changes in rural development by movingto new market-driven financing paradigms:diversified financial services with innovative financialproducts, value chain finance, warehouse receipts,international investment funds, combining financewith business development, ICT to improve costs &outreach.

2. Improve evidence base on impact of access tofinance.

3. Help build consistent and reliable data sources,which will permit credit scoring.


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W h a t i n i t i a t i ve s co u ld Plat f o r m m e m b e rst a ke t o g e t h e r t o su p p o r t t h e Gro u p sf i nd ings?

1. Help governments implement cons is ten t ruralfinance policies.

2. Capacity building and knowledge

management; e.g., map the publicinstruments that are available for financialinstitutions; document who does/offers what.

3. Directly target the issue of risk (both real and

perceived) in agricultural finance.4. Combine funding with smart subsidies (e.g.,

guarantee system) and r i sk sha r ing .


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W h a t a re t h e ke y m e ssa g es f r o m t h eGro u p t h a t Plat f o r m m e m b e rs sh o u ldf u r t h e r co m m u n i ca t e:

1. Momentum to improve financial services is now.

2. There is no silver bullet, but there are successfulexperiences on which one can build.

3. Look at agricultural finance not as a stand-aloneproduct, but in conjunction with risk and businessdevelopment

4. Medium- to long-term finance is a major

bottleneck for commercial banks: donors may help.

5. We need strong partnerships.

aga 2012__ breakout group 1 summary

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