Collaboration leads to improved Agri financing
According to the World Bank, Financial Institutions have limited presence in rural areas as well as lack of understanding of the business opportunities and risks in agriculture. The small size and fragmentation of farmers has prevented financial institutions to provide adequate support and funding to the agricultural sector.
The development of scoring models and digital applications, combined with big data analysis reduces the costs of financing the sector significantly. Building strategic alliances among banks, technology providers and agribusinesses is helps to reduce lending costs and mitigate credit risks. Working with multiple players to finance the agricultural sector increased the credit supply significantly. Modernizing the agricultural sector requires a proactive engagement among technology providers, farmers, crop processors, logistics companies and banks.
AdVision Finance designs and implements strategies, together with all parties in the value chain.
Geographic Information System
Map value chain actors
The approach chosen included the development of a Geographic Information System (GIS) to map value chain actors and adapt product specificities to the specific needs of the farmers. We supported the GIS specification writing and implementation plan. We formed a testing team and a trainer’s team and developed testing scenarios for system users and a training guide.
The GIS roll-out was evaluated, resulting in reports of the testing exercise and adjusting the design and strategy of the credit products based on geographical data. The product was introduced to around 3000 rural families.
Case Study
Increasing sustainable return in Agri finance value chains
The project development objective was threefold:
- Achieve sustainable increased returns to smallholder farmers from increased production volumes and quality in the targeted value chains
- Achieve improved market linkages, efficient farmer organization and higher farmers’ share over the final added value
- Ensure that selected value chains stakeholders had timely and adequate access to a diversified range of affordable financial products through applying innovative methodologies and approaches which adequately responded to the needs of the target group.
AdVision designed the financial product, strategy, procedures and pilot plan, and implemented the growth strategy, training and coaching plan.
We furthermore developed and implemented the banking operations coaching plan to accompany the team into making long term benefits of the newly implemented GIS system.
