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 Samara Casallas, Project Coordinator at Fundación Capital and newly appointed SAFIN Regional Network Coordinator for Latin America and the Caribbean (LAC), about the trends, challenges and opportunities in the region.
The global 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?
In LAC, we have found that although digital financial solutions and e-wallets have gradually gained traction among SMEs, many farmers and producer organizations still have limited knowledge of financial health and the financial products that would best suit them. It’s also worth mentioning that in Latin America, land ownership is frequently informal, which makes it difficult for farmers to access credit as they lack the necessary collateral. The same is true for indigenous peoples as their land belongs to the whole community. This further complicates their ability to secure formal loans and build a credit history.
Although a wide range of development entities, governments, and even private companies have initiatives around financial inclusion for SMEs, there is a noticeable lack of coordination among actors. Previous assessments and investments conducted in the region are often overlooked by new investors. This causes duplication, and related projects are typically limited to short-term training and the provision of working capital without long-term support.
What are the untapped opportunities for agricultural finance in your region?
Even though agritech has gained traction in the region, the funding allocated to Latin America represents only 5% of the global market. According to a recent report by GSMA, digital agriculture solutions are not reaching their full potential, in part due to an underdeveloped agritech ecosystem affected by disinvestment, limited regulatory support, and few opportunities for interconnection and sharing best practices.
Many organizations and governments are addressing this issue of financial education, but there is still a clear gap in practical knowledge and support to integrate financial health strategies for individuals and organizations. Market access is another untapped area that needs to be better integrated into support and financing initiatives for agricultural businesses.
We also need to continuously exchange experiences and collaborations in the use of green finance to identify the most suitable strategies for each context. The collection and analysis of comparable data is critical, especially because this field requires comprehensive risk and impact assessments at the economic, social, and environmental levels.
Fundación Capital 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.
At Fundación Capital, we work to improve the economic and financial lives of people living in vulnerable situations around the world, including rural populations that depend on agriculture. We drive disruptive activities through an ecosystem approach that allows us to build partnerships with public and private organizations that share our vision for change. We recognize that only through coordinated efforts can we advance the economic, financial, and digital inclusion of these communities.
With this philosophy, we have taken on the challenge of coordinating the Latin America working group of SAFIN. We understand that the issues faced by SMEs have deep-rooted causes and thus require innovative approaches and systemic transformations that can only be achieved collectively.
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?
Green Finance is undoubtedly a priority for the region, as it is for the entire SAFIN network, especially in relation to designing products that align with the needs and opportunities of each context. Market regulations for traceability, certification of environmental best practices, and fair trade are central to the work plans of producer organizations, investors, financial institutions, and governments in the region. These stakeholders are focused on creating tools and environments that facilitate compliance with these requirements. Issues such as deforestation, biodiversity conservation, and the transition to sustainable crops are significant in the region, especially with the upcoming COP16 event in Cali, Colombia.
LAC members are also keen on building the capacity of producer organizations to absorb finance. In the context of Latin America, it is also important that each strategy leaves no one behind. Incorporating gender perspectives and considering the unique needs of working inclusively with Indigenous and Afro-descendant communities is also a priority in the region.
Meet the Regional Coordinator
Social Communicator with a focus on communication-education and a specialization in the design and management of social technologies, Samara has over 12 years of experience in the social sector. She has worked directly with vulnerable communities, in conflict areas, as well as with high-level stakeholders from the private sector, government, international cooperation in Colombia and Latin America. Samara has been involved in land rights projects in Colombia, Guatemala, Bolivia, and Brazil, in both urban and rural areas. Additionally, she has worked on projects related to market connections across various value chains and on strengthening agricultural organizations and enterprises in high-vulnerability zones in Colombia.