The war in Ukraine began in February 2022, and much uncertainty remains around its effects on agri-SMEs and the institutions that finance them. Agri-SMEs, local financial service providers and global development actors discussed the key challenges and opportunities on the ground emerging from recent economic shocks.
The Smallholder and Agri-SME Finance and Investment Network (SAFIN) is a partnership of actors that are committed to aligning their efforts to scale up access to financial services for agri-SMEs and for small commercial farms. The network consists of financial institutions, philanthropic foundations, social lenders, technical assistance providers, farmers' organizations, and development finance organizations. From different vantage points, with different tools and entry points, each one of us works to bridge the investment gap in agriculture and food systems by financially empowering agri-SME and smallholder investors.
- Introduction : Event overview, structure and expectations - Francisco “Frank” Rubio, Interim Senior Coordinator of SAFIN and Senior Technical Advisor for ABC Fund, International Fund for Agricultural Development (IFAD). Frank is a development expert with 25 years of experience in agricultural finance, microfinance, technical assistance, training, and project management. He currently provides technical support to the ABC Fund and leadership in the growth of IFAD’s private sector portfolio. He recently took on the role of interim Senior Coordinator of SAFIN. Before this, he held progressively senior positions at the Inter-American Development Bank, Catholic Relief Services, CARE USA, and Oikocredit.
- The big picture: Global trends, challenges and opportunities - Madhur Gautam, Lead Economist, Agriculture Global Practice, World Bank Group. Mashrur is an electronics engineer by profession, an agricultural development enthusiast by passion, and a second-time founder. He also has 5 years of experience working in social development, chiefly for the youths and the rural population.
Madhur mentioned the report:
IFPRI (2021) Repurposing agricultural policy support for climate change mitigation and adaptation TASK FORCE 2 CLIMATE CHANGE, SUSTAINABLE ENERGY & ENVIRONMENT POLICY BRIEF, # 15 p.
The brief recommends that the G20: (i) supports the international AgIncentives Consortium to serve as an enhanced platform to monitor the environmental, as well as the economic and social impacts of agricultural support measures; (ii) prepares a guidance note for the international coordination of smart repurposing of agricultural support measures to align these with common objectives of sustainability and efficiency of food systems, poverty reduction, food security and affordability of healthy diets for all; (iii) organises joint sessions of Agriculture, Finance and Development Track Ministers to engage in policy dialogue leading to concerted action for the repurposing of agricultural support measures.
Agri-SME voices: Impacts of the crisis on the ground
- Patience Bature, Chief Executive Officer, Parkea Ventures, Nigeria. Patience is the Founder and CEO of Parkea Ventures, which sources, processes and distributes more nutritious food for Nigerian consumers. They promote the West African wonder-grain fonio as an alternative to wheat and maize for making bread, baby food, flour and more. As imported wheat flour doubles in cost, fonio offers a rapidly scalable, nutritious, climate-resilient, staple crop that is grown domestically by women smallholder farmers.
- Nouran El Said, Co-Founder, Plug'n'Grow, Egypt. Nouran is a Co-Founder of Plug’n’Grow, an Egyptian technology company that develops advanced and economic solutions in agriculture, based on proven Hydroponic and Aquaculture technology. They provide growers with highly efficient “Food Factories” that produce premium quality vegetables and fish at competitive and affordable costs.
Nouran:
"AWESOME (mAnaging Water, Ecosystems and food across sectors and Scales in the sOuth Mediterranean) is an EU funded project to develop a multi-level decision making platform for policy makers in the Mediterranean Region. I highly encourage following up on it, as it adopts a Nexus approach."
"I think we need the studies to decide, which is more suitable and effective to be applied where. This requires very tight coordination with the governments to implement the right policies and incentives to facilitate the uptake"
"Technology development is very fast and my concern is that the financial sector is not necessarily aware of what’s out there - for example technologies that can produce at the same cost of traditional agriculture, while saving 90% of water and 40-60% of fertilizers - so it is understandable how they evaluate risk. Which is why I recommended feasibility studies that study each case properly with all its inputs. In that light, I know that risk is actually lower and not higher"
- Ruchi Jain, Chief Executive Officer, Taru Naturals, India. Ruchi is the CEO and Founder of TARU Naturals & Organics, a grassroots movement of 10,000 tribal &small-scale farmers across India. It is a fair trade network connecting farmers with healthy, pure and organic produce to markets. They strive to build self-sufficiency across agricultural value chains through climate-resilient agriculture, clean post-harvest technology, value added products and market linkages.
- MODERATOR: Ian Randall, Director and Principal Consultant, Good Food Hub. Ian is Director of the Good Food Hub, a global community of small businesses making food more nourishing, sustainable, equitable, and resilient. Ian established the hub after managing global SME engagement for the UN Food Systems Summit. Previously Ian has played a strategic role in founding and strengthening Generation Africa and Grow Africa, and through his consulting firm, Wasafiri, he has worked on food issues for the World Economic Forum, Mars, Yara, IMAGINE, and most G7 governments.
Views from local Financial Service Providers: Agri-SME risk assessment and lending in the current context
- Prasun Das, Secretary General, Asia-Pacific Rural and Agricultural Credit Association (APRACA). Prasun currently leads the Asia-Pacific Rural and Agricultural Credit Association (APRACA) as its Secretary General. Prasun has previously held positions at IFAD, FAO and DFID in various capacities focusing on rural finance. He also held senior positions in a commercial bank and advised the Government of India on rural and agricultural development. Prasun holds a Doctoral Degree in Agricultural Sciences and MBA with specialization in Financial Management and is a certified professional in banking and finance.
- George Macharia, General Manager, Food & Agriculture Banking, Equity Bank. George is a career banker with over 20 years of experience. In recent years, he has worked in rural and agricultural banking, including agricultural value chain mapping, development of financing products, and building human and other resources to deliver agricultural value chain finance. George is a trained accountant, enterprise development expert and certified Agricultural Finance professional.
- Hussein Abou Bakr, Founder & CEO, Mozare3. Hussein has over 18 years of hands-on commercial and operational experience in agribusiness. He co-founded Mozare3, a leading agri-fintech platform that partners with small farmers, offering contract farming, input financing and digital agronomy support. Hussein holds a Bachelor’s degree in International Marketing from The American University in Cairo.
- MODERATOR: Liliana Pozzo, Sustainable Finance Advisory Services Manager, Latin Amercia & Europe, International Finance Corporation (IFC).
Global development community perspectives: Adapting existing and new investments in response to the war in Ukraine
- Thouraya Triki, Director, Sustainable Production, Markets and Institutions Division, IFAD. Thouraya directs IFAD’s Sustainable Production, Markets and Institutions Division. Before joining IFAD, she worked at the African Development Bank (AfDB) as a Manager in the Microeconomics, Institutions and Development Impact Division and as a Chief Country Economist at AfDB's North Africa Regional Department. Before joining AfDB, Throuraya spent about 10 years in various positions in academia, and managing and consulting with private sector businesses. She holds a PhD in finance from HEC Montréal.
She referred to the fact that only 1.7 per cent of climate finance – a fraction of what is needed - goes to small-scale farmers in developing countries despite their disproportionate vulnerability to the impacts of climate change.
See: IFAD (2020) Examining the Climate Finance Gap for Small-Scale Agriculture # 60 p. - Nabil Ghalleb, Director, Economic Empowerment Department, Islamic Development Bank (IsDB). Dr. Ghalleb leads IsDB’s initiatives to institutionalize, mainstream and implement economic empowerment models and tools in the OIC Member Countries. Before this, he was the Chairman and founding CEO of “Zitouna Tamkeen”, an Islamic microfinance/economic empowerment institution in Tunisia. He also founded the International Center of Economic Empowerment and “Tamkeen for Development”, an NGO specialized in the economic inclusion of vulnerable populations. Previously, he held various senior positions at IsDB and served on the Boards of several financial institutions. Dr. Ghalleb holds a PhD in Finance from HEC Montreal.
- Dr. Leonard Mizzi, Head of Unit, Sustainable Agri-Food systems and Fisheries, Directorate-General (DG) for International Partnerships, European Commission. Dr. Mizzi has been in his current role since 2017. Prior to this, he was the Head of Unit in the DG for Agriculture and Rural Development. Dr. Mizzi has broad working experience in the Maltese public administration and private sector, including the Office of the Prime Minister, Office of the Malta Chamber of Commerce and Enterprise, Malta Business Bureau in Brussels, and the Malta Hotels and Restaurants Association. He has authored a number of articles and publications on agri-food issues and nutrition in the Mediterranean region. He holds a PhD in Agricultural Economics from the University of Reading.
- MODERATOR: Songbae Lee, Agriculture Finance Team lead, Bureau for Resilience and Food Security, U.S. Agency for International Development (USAID). Songbae leads efforts at the USAID to mobilize private capital for agricultural finance. Most recently, he spent eight years at Calvert Impact Capital, a non-profit impact investing debt fund, where he was responsible for end-to-end deal origination, credit assessment, and ongoing portfolio monitoring. Previously, he worked for Dresdner Kleinwort Wasserstein, Banc of America Securities, and Mercy Corps in Kyrgyzstan. He holds an M.B.A. from the University of Chicago and a B.S. from the University of Vermont.
Moving forward, together: Generating collaborative action for inclusive agri-SME finance in times of crisis
- MODERATOR: Bettina Prato, Lead Policy and Technical Advisor, Programme Management Department, IFAD. Bettina is currently a Lead Policy and Technical Advisor at IFAD and the former Senior Coordinator of SAFIN. In her previous roles, she served IFAD in several capacities, including as a Senior Global Engagement Specialist, as a co-author of the IFAD Rural Poverty Report 2011 and contributor to a number of IFAD corporate strategies and policies. Bettina has twenty years of experience in international development, with particular focus on global development governance, development finance, food security and rural development. She holds a PhD in Political Science from the University of California at Berkeley.
Publication:
SAFIN (2021) The role of blending in green finance for agri-SMEs SAFIN learning note. # 2 p.Addressing climate change in food and
agriculture, both in terms of mitigation
and of adaptation, requires large-scale
investments of both public and private
resources. Blended finance can be an
important part of the financial toolbox
used to mobilize and align a variety of
private financial flows towards such
investments, not only by de-risking
financial flows but also by expanding
pipeline and facilitating ecosystem
alignment around what constitutes
green business models for small and
medium-sized enterprises active
in food and agriculture (agri-SMEs).
Related
The European Investment Bank (EIB) TA Financial Sector Programme for West and Central Africa and Making Finance work for Africa (MFW4A-AFDB) hosted webinars on “How banks assess climate risks and integrate them into credit risk assessments”. Practice should inform if Agri SME's benefit from such initiatives.
See: http://paepard.blogspot.com/2022/03/involvement-of-private-sector-in.html
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