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 – part of the special initiative One World – No Hunger
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Supraregional: Benin, Zambia, Mali, Nigeria, Cameroon, Burkina Faso, Togo, Malawi
Lead executing agency: Ministries of agriculture in the partner countries
Overall term: 2016 to 2024


In many African countries, agriculture, along with its upstream and downstream enterprises, plays a key role in economic development. It provides employment for more than 80 per cent of the rural population. However, most rural, small-scale enterprises are not geared to market needs and are barely integrated into the monetary economy.

The agricultural sector has many special characteristics, which the financial system does little to accommodate, although progress has been made in the last 20 years. Banks and (micro)finance institutions mainly focus on urban areas and offer few financial services which are adapted to the needs of farms and agri-based enterprises, such as the seasonal nature of agriculture or the risks attached to prices and weather. This limits or prevents investments in agricultural production, processing and marketing.

Until now, financial service providers to farmers or to agri-based  small and medium-sized enterprises in Benin, Zambia, Nigeria, Cameroon and Mali have made only a limited contribution to the development of the rural economy. On the demand side, there are very few business models deserving of financing, while on the supply side there is a shortage of adapted financial services.


The provision of farms and agri-based enterprises in rural areas with financial services adapted to their business models has improved.


The project promotes the development and introduction of needs-oriented financial services for farms and agri-based enterprises in rural areas. On the supply side, it supports the expansion of selected national financial institutions into the agricultural sector and assists them with developing adapted financial services based on the business models the project has identified as viable. On the demand side, the project is strengthens the entrepreneurial and financial skills of farmers and agri-based enterprises. This helps them to better assess the economic efficiency and profitability of their business operations as well as to take an informed decision between investment options. The project provides access to its analysis and training instruments for other projects and shares the lessons learned in the process.

Sharing successfully piloted models more widely represents a significant contribution to the emergence of effective markets for needs-oriented financial services. Exchange between state representatives and actors from the agricultural and financial sectors can influence the underlying conditions for rural development, and contribute indirectly to better cooperation within and between the two sector.

The measures take into special consideration the needs of enterprises managed by young people and women. If women have access to advice and capital, it strengthens their economic and social participation and enhances gender equality. 

The market potentials of agricultural value chains in Benin, Zambia, Nigeria, Cameroon, Mali, Burkina Faso, Togo and Malawi provide entry points for the project. These potentials have been identified by bilateral and regional projects of financial cooperation, and by the Green Innovation Centres for agriculture and the food sector. The project also ties in with the refinancing measures for selected financial institutions planned as part of financial cooperation with these countries.

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