Bundling development services with agricultural finance
AbstractAgriculture is the largest economic sector in most African countries and remains the best opportunity for economic growth and poverty alleviation on the continent. Yet, sadly, the sector has been in decline over the past 40 years, and poor farmers have largely remained poor. This failure is due to many factors, including collapsed agricultural development banks, corruption, inadequate infrastructure, and poor soils and seeds. It has also occurred because smallholder farmers lack access to critical information, market facilitation, and financial intermediation services. This brief reviews the DrumNet Project and its approach to improving farmers’ access to finance in Kenya. The project has found that financing small-scale farmers is challenging given the cost and risk associated with serving rural, relatively isolated clients. Lending becomes increasingly feasible, however, in a supply-chain approach in which farmers are connected to a formal network of buyers, retailers, and financiers.
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Bibliographic InfoPaper provided by International Food Policy Research Institute (IFPRI) in its series 2020 vision briefs with number 18(14).
Date of creation: 2010
Date of revision:
agriculture finance; DrumNet; economic growth; Poverty reduction; Small-scale farmers; Supply chain management;
This paper has been announced in the following NEP Reports:
- NEP-AGR-2010-07-31 (Agricultural Economics)
- NEP-ALL-2010-07-31 (All new papers)
- NEP-MFD-2010-07-31 (Microfinance)
- NEP-PPM-2010-07-31 (Project, Program & Portfolio Management)
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