In recent years, the global economy has navigated shock after shock, from the COVID-19 pandemic to climate events and more recently the war in Ukraine. In the face of this, agricultural SMEs are facing unprecedented pressure, including increased operation costs, lower profit margins, and higher interest rates. Put together, these result in an urgent need for tailored capital by these enterprises, to which the providers and enablers of agricultural finance must respond. Our work under this theme is designed to equip them with timely information and tools to effectively pivot their investments and programmes to deliver capital to agricultural SMEs when they need it the most.

Learning partners

Blended finance brings together concessional and commercial capital within a single financial vehicle or transaction. Its use in the agriculture sector has the potential to unlock the flow of more commercial capital towards agricultural SMEs when it is held back by high risks or low expected returns. From 2018-2021, SAFIN joined forces with the Organization on Economic Cooperation and Development (OECD) and other learning partners to investigate whether and how blended finance could be used to address some of the risks and costs confronting financiers looking to invest in food and agriculture, and particularly in agricultural SMEs.

Learning partners

Technical assistance and Business Development Services (BDS) are critical to the business performance and growth of agricultural SMEs. Institutions referred to as Enterprise Support Organizations (ESOs) provide these essential services to SMEs at different stages of their growth. However, there are no established standards for the type or quality of services delivered to SMEs, and there is limited knowledge available about their effectiveness, economic efficiency and impact on the growth and access to finance of agricultural SMEs. SAFIN is currently working with various partners to develop evidence-based benchmarks to measure the impact of enterprise support on access to finance, to standardize BDS curricula and to establish value-for-money metrics for the funders of such services.

Learning partners