The agricultural finance sector is changing rapidly, with new trends taking root in different geographies. The Smallholder and Agri-SME Finance and Investment Network (SAFIN) is changing with the times, and bringing its services closer to the providers, enablers and recipients of finance for sustainable food systems on the ground. Our members are committed to supporting this evolution, with four institutions stepping up to host Regional Network Coordinators for SAFIN activities in Asia and the Pacific, Latin America and the Caribbean, West and Central Africa, and East and Southern Africa.
In this interview, we hear from Regina Durst, newly appointed SAFIN Regional Network Coordinator for Asia and the Pacific, hosted by the Asia-Pacific Rural and Agricultural Credit Association – APRACA, about recent trends, challenges and opportunities in the region.
The financing gap faced by agricultural SMEs continues to linger despite decades of support for the sector. What are the main challenges you see in your region?
While there is a large gap in financing for agri-SMEs globally, there are unique regional challenges that complicate and contribute to this issue. In Asia and the Pacific islands, one pressing concern is the high degree of vulnerability to climate change. No other region in the world is as disaster-prone as Asia, including hazards such as droughts, floods, typhoons, and saltwater intrusion, which all have a significant impact on the agriculture sector. Farmers and agri-SMEs must move towards climate-resilient agriculture urgently. This context makes potential investors perceive agricultural investments as high-risk.
Asia also has highly fragmented agricultural systems which limit economies of scale and can slow the growth of SMEs. Agribusinesses in rural areas have limited access to the advisory services that would improve their investment readiness, partly due to underdeveloped infrastructure like roads and digital connectivity. These are challenges experienced across different regions to varying degrees, which makes SAFIN’s role as a platform for exchanging knowledge globally even more important.
What are the untapped opportunities for agricultural finance in your region?
Digitization and technological innovation are often at the forefront of people’s minds when they think about opportunities for agricultural finance in Asia. There is huge potential to dramatically change the financial inclusion gap for farmers and small businesses with digital platforms. Mobile banking, digital wallets, and agriculture-specific fintech apps can provide easier access to credit, insurance, and payment services, especially in rural areas. The field is wide open for innovative digital solutions to change the sector dramatically, especially in Asia, where mobile connectivity is rapidly increasing even in remote areas.
Agricultural insurance products like weather-indexed and yield-based insurance are underdeveloped in many Asian markets. Insurance that pays out based on weather data rather than actual losses can provide timely and urgently needed support to farmers, particularly if it can be delivered digitally.
APRACA recently took on a leading role in convening the agricultural finance community in your region through SAFIN. Please tell us about your institution’s agricultural finance work, and what informed its decision to take on this role.
APRACA is a consortium of apex banks, rural finance, and agricultural credit institutions across Asia and the Pacific. We promote cooperation in the field of rural finance in the region, share best practices and knowledge, and provide training to financial institutions on topics like linkage banking, agricultural finance, and green finance for agriculture. Originally sponsored by the Food and Agriculture Organization (FAO) of the United Nations in 1977, APRACA has always been deeply committed to fostering cross-border collaborations on agricultural finance. With its diverse and expansive network of affiliated financial institutions, it seemed appropriate for APRACA to step into a leadership role for SAFIN in the region.
As you chart a path for your new role as Regional Network Coordinator, what have you heard from SAFIN members in the region as their key priorities? What are your hopes for network members to achieve together in the region?
Two big interests for SAFIN members in Asia are co-designing and implementing agri-tech and fin-tech solutions, and improving access to green and climate financing for agricultural SMEs and smallholders. Just after joining SAFIN, I had the opportunity to meet members at the network’s regional convening in Cambodia and hear from them directly about key challenges, successes and priorities for the sector. I look forward to understanding of their priorities over time. The diversity of institutions in the region means that there are a lot of topics to cover at all times, and I am looking forward to focusing on a unified action plan that encompasses the wide range of work needed in this region.
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Meet the Regional Coordinator
Regina Durst is the Regional Network Coordinator for Asia and the Pacific. She has direct experience with smallholder farmers and agri-SMEs in the Asia-Pacific region and North-western USA, as well as with NGOs and intergovernmental development agencies. Her previous role as a consultant with the Food and Agriculture Organization (FAO) of the United Nations was focused on advancing investments in Asia for forest and landscape restoration. Before joining FAO, she worked with a women-led agri-SME in northern Thailand, assisting the enterprise with the process of business investment readiness and further developing its value chain. Regina holds a bachelor’s degree in Environmental Studies and Terrestrial Resource Management from the University of Washington, with a concentration on stakeholder engagement and science communications.
