Feed the Future
This project is part of the U.S. Government's global hunger and food security initiative.

Smallholder and Agri-SME Finance and Investment Network Fosters Collaboration in Agricultural Finance

About a year ago, at the end of a major international conference on Investing in Inclusive Rural Transformation: Innovative Approaches to Financing, International Fund for Agricultural Development (IFAD) took on the challenge of incubating a new network of institutions with a shared interest in bridging the gap in access to finance by small and medium-scale agro-enterprises. This commitment came from a shared belief among prospective network partners in the critical role that these enterprises — from smallholder farmers to small and medium-sized enterprises working all along the agriculture value chain — play in investing in food systems and rural economies worldwide as well as the major role that these in turn play in realizing the 2030 Agenda.

The Smallholder and Agri-SME Finance and Investment Network (SAFIN) has since taken shape as an inclusive partnership of actors operating in different parts of the ecosystem for agri-food and rural SME investment with a focus on access to finance and complementary services.

Supported by a small team housed at IFAD, thirty institutions from the private, public and philanthropic sectors have come together in the course of the past several months to define a joint agenda that touches on all key parts of the ecosystem. For the pilot phase of SAFIN, running to the end of 2020, this agenda will focus on five works treams (see below). In each of these, the network provides partners with a pre-competitive space to align their efforts and to scale up and multiply their positive impact through learning, peer support, frank and open dialogue, and the identification of opportunities for coordinated action on the ground.

In the coming months, most of the focus has been on refining and piloting the use of an innovative "investment prospectus framework" (IPF) in four pilot countries in the Caribbean and sub-Saharan Africa. The IPF is a country-level diagnostic of investment and financing gaps and opportunities for agri-food and rural SMEs, mapped against each other and against SAFIN partners' activities in selected countries. It aims to inform the work of partners to focus on key strategic gaps and levers of change for ecosystem impact in countries where major opportunities for agri-SME investment are not being captured because of lack of well-functioning financial ecosystems. The first pilot of the framework is being led by the International Trade Centre in the coconut value chain in Jamaica as part of their broader Alliances for Action framework (A4A). Other IPF pilot countries include Dominican Republic, Uganda and Nigeria. India, Ghana, Colombia and Vietnam may also be the object of pilots in the coming months.

Under the innovation work stream, partners are focusing on their key learning needs and areas of most promising innovation in business models for the delivery of technical assistance to agri-SMEs. A series of webinars are planned for 2018 followed by a two-day workshop in early October in Rome.

Finally, the network is engaged to collaborate closely with the OECD on a deep dive into the application of good practices for blended finance in the space of agri-SME finance as a contribution to ongoing dialogue among the main bilateral donors, international financial institutions and the UN system Financing for Development process on how to best mobilize private finance for the realization of the 2030 Agenda.

For more information about SAFIN, please contact a.valentini@ifad.org.