In anticipation of SAT 2023 (African Microfinance Week 2023), its organizers convened a roundtable on October 19 as part of Accion’s Financial Inclusion Week. The panel illustrates the commitment of the organizers of SAM to nurture an ongoing dialogue on the issues facing the inclusive finance sector. The objective was to share and question the strategies implemented to respond to the challenges of the agricultural sector, which remains one of the least financed due to its high-risk perception by investors.

Climate change, coupled with social and political unrest, is having a negative impact on agricultural value chains in particular and global food security in general. The conflict between Ukraine and Russia is weakening food security and agricultural production in many developing countries, as the warring countries are two of the largest exporters of key agricultural products such as wheat, corn, oil sunflower and fertilizers. The Horn of Africa could suffer the worst effects of the war due to its lingering food crisis after three years of severe drought, the COVID-19 pandemic and protracted local conflicts. Market volatility and rising energy costs, input costs, interest rates and perceived risk are expected to lead to higher borrowing costs, credit crunches and unmet cash flow needs. working capital and cash.

These questions were addressed during the Financial Inclusion Week panel:

– Jacques Afetor, Executive Director of Assilassimé Solidarité, a Togolese MFI supporting small farmers to increase food security despite the effects of climate change.

– Nadia Ouriemchi, senior project manager at the Luxembourg NGO ADA, whose work includes tailoring financial and non-financial solutions for smallholder farmers to facilitate access to value chains, markets and climate change adaptation tools.

– Emmanuel Vuillod, investment manager at SIDI, French investor and active partner of the Smallholder Safety Net Upscaling Programme, coordinated by ADA and co-financed by the Swiss, Liechtenstein and Luxembourg governments.

– Renée Chao-Beroff, managing director of the France-based microfinance network Pamiga Finance.

During the forum, panelists discussed a wide range of strategies to improve the livelihoods of various underserved (and overlapping) groups, such as smallholder farmers, women and youth. For example, some farmers need encouragement to develop their activities. This may take the form of business training or funding to mechanize their operations. For a livestock farmer, an unsecured loan can be used to buy food and hire a veterinarian.

In addition to financial services, non-financial services can help farmers reduce climate risk by helping them prevent erosion and adopt environmentally friendly fertilizers and pesticides. Farmers can also adapt to climate change by changing the crops they grow or diversifying their activities. A corn farmer might start raising cattle. Another farmer might switch to growing farro, a cereal adapted to drier growing conditions. In Burkina Faso, SIDI worked with farmers to switch to organic potato cultivation, encouraging them with subsidies that were phased out as the crop proved successful in the region.

Another way to help farmers is to support producer organizations, which often need to improve their financial management and governance. Improving access to international markets can also increase incomes, but this requires technical assistance for producers to improve their food safety standards, for example with laboratory testing, packaging and better hygiene practices. . ADA offers exporters loans of up to €300,000 to help them increase their supply from smallholder farmers. The Egyptian company Green Hope, for example, is stepping up its efforts to buy organic products from smallholders. ADA is supporting the company by digitizing its training materials to help farmers meet Green Hope’s quality standards.

Online platforms can help farmers scale by making better choices – such as seed selection and when to plant and harvest – and getting better post-harvest prices. Other examples of digital services include insurtech solutions that cover livestock in Senegal as well as several youth-led e-commerce businesses that are active in the food sector. One of the challenges of digital services is ensuring they are client-centric and accessible to members of underserved groups. In addition to lacking technological knowledge, members of these groups often lack access to land or paperwork to prove land ownership. They are also more likely to need help to mechanize their farms.

Overall, panelists find that recent crises have exacerbated existing challenges more than they have created new ones. However, they argue that building networks and adopting long-term holistic approaches can enable greater impact. And, while measuring that impact is expensive, it is worth it.

These challenges, models and opportunities are just a few of the many we invite you to explore at the next SAM, to be held in 2023 in a West African country to be announced soon! To receive updates on SAM 2023, please subscribe to ADA SAM Newsletter.

This feature is part of a sponsored series bridging next year SAT 2023which will take place in West Africa, SAT 2021, held in Rwanda. SAM is organized by ADA and the Microfinance African Institutions Network with the support of the Directorate for Development Cooperation and Humanitarian Affairs of Luxembourg and the government of each respective host country. MicroCapital has been committed to promoting SAM since 2015.

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