Policy Brief: State of the Evidence in Finance and Movable Collateral
Timely access to appropriate financial products is critical for financing the agricultural technologies necessary to achieve Feed the Future goals. Access to appropriate financial products enables farmers to obtain the improved inputs and finance productive capital investments needed to boost productivity for small and medium sized farms. Yet the agricultural sector too often faces higher transaction costs and special production cycles distinct from other economic segments, posing special challenges to meet the needs of the sector.
This paper incorporates findings and lessons learned from EAT's work on the enabling environment for accessing finance with movable collateral. This paper supplements EAT project findings with recent evidence from research institutions, international organizations, and think tanks to understand what is known, and to identify knowledge gaps to support greater impact by the Feed the Future initiative. The following sections explore the documented costs of various legal, regulatory, and institutional challenges to agricultural finance and movable collateral, and provide information regarding the effectiveness of reforms.