rural, agricultural and value chain finance
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Rural, Agricultural and
Value Chain Finance
Linda Jones
Chiang Mai, Sept 2007
Financial Services for the Rural
Poor - CGAP
Financial Services
Rural Finance
Agricultural Finance
Agricultural CreditFinancial Services
Financial Sector
Rural Finance
Agricultural
FinanceMicrofinance
Source: CGAP Donor Brief No. 15 October 2003
Report From RAF Conference –
Rome, March 2007
• Conference on rural and
agricultural finance
• Sponsored by FAO, IFAD, Ford
• Leading experts – researchers,
practitioners, government,
bankers
Emerging Themes in RAF*
• Regional diversity cannot be
generalized
• Research and services must be
demand-driven
• Institutional diversity equals
increased access
From Jones, SED Journal (EDMJ) Sept 2007
Emerging Themes in RAF (2)
• Are we reaching the very poor
and do we care?
• Value chain approaches offer
potential for impact
• Innovation in products /
services is a must
Emerging Themes in RAF (3)
• Define role of government
• Ignore gender at peril
• Understand and manage risks
• Need greater sharing of
information and research
Fitting VC Finance into the Picture
Financial Services
Financial Services
Rural Finance
Agricultural Finance
Microfinance
Agricultural CreditFinancial Services
Financial Services
Rural Finance
Agricultural FinanceMicrofinance
Value Chain Finance
Adapted from: CGAP Donor Brief No. 15 October 2003
Financing the Value Chain
• Not just finance within the value
chain
• Financial services needed at all
levels to ensure healthy
functioning of value chain
Value Chain Finance
MSME Finance
Commercial Banks, MFIs, CUs
Consumer
Banking
Commercial Banks, MFIs
MFIs, CUs, Coops
Commercial Banks, MFIs
Producers/
Groups
Suppliers
Wholesalers
Retailers
Value Chain
Final Consumers
Value Chain Finance MSME Finance
Microfinance
Support
Services and
Products
MSME
FinanceCommercial
Banks, MFIs
Financing the Value Chain
- Tajikistan
• Horticulture subsector project
• Microcredit to smallholders
• SME finance to processors and
suppliers
• Matching
grant facility
Financing the Value Chain
- Challenges
• Complexity of programming - systems
• Implementing agency capacity
• Local capacity
• VC Players
• Donor buy-in
Thank you!
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