Promotion of agricultural finance for agri-based enterprises in rural areas

Project description

Title: Promotion of Agricultural Finance for Agri-based Enterprises in Rural Areas
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Supraregional: Benin, Burkina Faso, Cameroon, Côte d‘Ivoire, Malawi, Mali, Nigeria, Togo, Zambia
Lead executing agency: Ministries of agriculture in the partner countries
Overall term: 2016 to 2025


In many African countries, agriculture, along with its upstream and downstream (agri-based) enterprises, plays a key role in economic development. It provides employment for over 80 per cent of the rural population. The upstream and downstream enterprises include producers of inputs (seed and fertilisers) and processors (rice mills). However, most agricultural and agri-based enterprises are not geared to market needs and are unlikely to be integrated into the monetary economy.

This is because banks and (micro)finance institutions focus mainly on urban areas. Despite the progress made over the past 20 years, they offer few financial services tailored to the needs of agricultural enterprises. These include, for example, agricultural seasonality and the risks attached to prices and weather. This inhibits or prevents investment in the agri-based value chain.

There are also very few agricultural enterprises with bankable business models. Such enterprises often lack the business management knowledge required for well-founded investment decisions.


The provision of financial services to agricultural and agri-based enterprises in rural areas that are tailored to their business models has improved.


The project is part of the One World – No Hunger Initiative. It advises and supports the expansion of financial institutions into the agricultural sector and assists them with developing adapted financial services. This process is based on the business models the project has identified as viable. Particular attention is paid to the needs of businesses owned by women and young people. Innovations that promote the environmentally aware transformation of agricultural systems receive special attention.

The project also provides training to enterprises in the agriculture sector. It helps these enterprises acquire business management and financial skills.

The previously identified market potential and investment needs along various agri-based value chains form the starting point for the project’s work and have been identified by the Green Innovation Centres for the agri-food sector and by other bilateral and regional projects.

In addition to close technical coordination with other relevant projects, the project also cooperates closely with actors in the German agricultural and financial sectors and with financial policy projects implemented by KfW Development Bank to exploit intended synergies.

Sharing successfully piloted financial products more widely represents a significant contribution to the emergence of effective markets for needs-oriented financial services. To this end, the project promotes international dialogue between governmental and private sector participants in the agriculture and financial sectors.

Because of the impact of the COVID-19 pandemic, digital applications are increasingly important in agricultural finance. They are therefore increasingly integrated into the development of adapted financial services. Digital applications also reduce the transaction costs of financial services, which are often very high in rural areas.

The project supports (semi-)governmental agricultural support institutions, advisory services and their educational institutions in sustainably mainstreaming the knowledge products developed by the project. It also makes analysis and training tools available to other projects, and shares its experience of implementation.

The project contributes to several Sustainable Development Goals (SDGs): ’No poverty’ (SDG 1), ‘Zero hunger’ (SDG 2), ‘Gender equality’ (SDG 5), and  ‘Decent work and economic growth’ (SDG 8).


  • To date, more than 23,500 small farmers and agri-based rural enterprises in five countries (as at 2020) have taken advantage of financial services tailored to their needs and provided by the project’s financial partner institutions. Most enterprises previously had no access to formal and regulated financial institutions. About 44 per cent of these enterprises are managed by women and about 30 per cent by young people.
  • Over 29,000 farm managers have improved their business management skills. They are now able to determine their investment needs and present them appropriately to banks.

Last update: March 2021

Additional information