Access to financial services by agribusinesses and smallholders has consistently been raised as key to unlocking Africa’s agricultural growth potential. Lack of finance is a systemic issues, with knock-on effects throughout the entire agricultural value chain.  Most smallholders are unbanked and have no credit history and although many aggregate into formal groups and through registered farmer organisations, they are considered risky by banks. Lack of finance means farmers are not able to modernize, and are often forced to sell to the nearest buyer, in many cases reneging on contracts, as they are desperate for cash. Unreliable supply increases risks for players further down the supply chain, such as agro-processors, which, in turn, makes them also unattractive to financers. Without capital, small- to mid-sized companies cannot modernize and mechanize, which hinders productivity. Improving the stability of the agricultural supply chain is also vital to attract much-needed foreign direct investment by international food companies.

Breaking this vicious cycle requires a coordinated effort by multiple stakeholders. Grow Africa works as a broker of connections, incubator of multistakeholder financial solutions and disseminator of best practice by:

  • Facilitating access by individual agribusinesses (with a focus on those that have committed to agricultural investments through Letters of Intent to Invest to financial service providers and funding partners.
  • Contributing through the Grow Africa Finance Working Group to the development of holistic solutions to reduce business risk and combine different types of financial products specific to the agriculture sector.
  • Supporting the development - at regional and national level - of crop-specific, value-chain platforms for initiatives with high potential for transforming agriculture in specific countries or regions. The Secretariat identifies and convenes relevant stakeholders for these platforms, from agribusinesses to finance and technical partners.
  • Facilitating best practice sharing through the Grow Africa Finance Working Group, the Grow Africa Smallholder Working Group and the annual Grow Africa Investment Forum.

Additional Information

Finance Working Group

The Grow Africa Finance Working Group comprises experts from across banks, agri-businesses, NGOs and international bodies to incubate specific initiatives aimed at addressing systemic finance issues.

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Find a Financier

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Resources

The ‘Africa rising’ story prevails: Why Inflection Point matters to Africa’s smallholder farmers

Using...

Small and medium-sized agrifood enterprises play a critical role in achieving food security in Africa. A healthy SME sector can ensure...

PART ONE: FINANCING FARMERS TO IMPROVE RELIABILITY

Read how domestic and International agribusinsses are...