The agriculture sector plays a unique role in its contribution and exposure to climate change. Yet, as of 2020, only 3% (US$20 billion) of global climate financing was allocated to the agriculture, forestry, and land use sectors. Of this US$20 billion, a mere 4% reached value chain actors, including small and medium-sized enterprises and farmers’ organizations. Our current work under this theme aims to guide the development, deployment and management of green finance portfolios to effectively channel more financial resources to enable agricultural SMEs mitigate and adapt to the effects of climate change.

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Farmers’ organizations play a fundamental role in many value chains by aggregating groups of producers and offering them a range of services, from access to inputs, markets, financing, storage and training. Yet, like agricultural SMEs, farmers’ organizations face difficulties in accessing funding that is adapted to their needs from traditional financial service providers, mainly due to their size, legal status, and focus on the agricultural sector. Our activities under this theme seek to better understand the current financing gaps faced by farmers’ organizations, their role in financing small-scale farmers and how to improve their access to commercial capital. SAFIN members are also collaborating to develop a financing solution that is well adapted to farmers’ organizations in different geographies.

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New digital solutions, services, platforms and business models have emerged in the agriculture sector to serve clients in the most remote areas. Such services hold great potential to improve the access to finance and operational performance of agricultural SMEs and farmers’ organizations by reducing costs or increasing efficiencies. However, digital innovations are generally expensive to launch and often struggle to reach commercial sustainability. Our learning agenda on this topic will explore the key success factors of innovations that have achieved commercial viability and scale, the role of concessional capital in graduating agtech or fintech start-ups from early stage capital to growth capital and the impact of digital innovations on access to finance for agricultural SMEs.

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