Improving Access to Finance for the African Agriculture Sector

BMZ has allocated resources, as part of its special initiative One World No Hunger (SEWOH), to improve access to and utilization of demand driven financial services

Improved access to financial services and their better utilization have great potential to boost much-needed investments in agricultural innovations — which is a main aspect of the goals SEWOH is set to achieve.

The Global Project Promotion of Agricultural Finance for agri-based Enterprises in Rural Areas, short GV AgFin, works on developing and implementing approaches and instruments to promote access and better use of demand-driven financial services for farmers and agricultural based rural enterprises. It aims to combine agriculture sector development and financial systems development strategies to address both demand and supply side constraints simultaneously. Its activities are not only aimed at farmers and agri-businesses, but also at financial institutions on the supply side.

Current countries of implementation include Benin and Zambia. From 2018, the project will start implementing in another four countries.

The project has three main components

  1. Knowledge management and transfer of know-how
  2. Supporting the demand side
  3. Supporting the supply side.

Main workstreams

  • Demand-side — Identification and analysis of agriculture business models

    In selected value chains linked to the respective Global Project Green Innovations Centres (GV GIAE), sustainable and scalable business models are identified and analysed. The business model analysis builds the basis for consultations with financial institutions to amend existing or developing new financial products, which match the needs of the specific value chains.

  • Demand-side — Agricultural Business Analysis and Investment Training

    Based on the successful conclusion of the Farmer Business School and similar trainings, emergent farmers, rural cooperatives and agri-based MSMEs will be trained and coached to enable them to manage their businesses professionally and take informed investment decisions. The training will cover business planning and management skills, economic analysis of investments, whole farm planning, business plan preparation, including the preparation of a financing strategy, and different risk management strategies and financial management as well as negotiation skills with financial institutions.

  • Supply-side — Agricultural training for financial institutions

    Specific agricultural and value chain finance trainings are offered to partner financial institutions in the respective countries. The trainings are tailored to the specific training needs of financial institutions and financing needs within each value chain. In particular, the training will build on identified promising business models and its implications for financial products.

  • Supply-side — Development of demand-driven financial services for farmers and agriculture-based rural enterprises

    Selected partner financial institutions are supported in improving their capabilities in offering financial services to rural/agricultural smallholders, cooperatives/farmer-based organisations and agri-based MSMEs by amending or developing demand-driven financial products and adapting internal processes accordingly. New distribution channels, as well as advanced technological support tools, are considered in the process.

Business model analysis

Identifying and analysing profitable business models and their financing needs

Under the second work stream, GV AgFin analysed selected business models from selected value chains in Benin and Zambia. In cooperation with other bilateral and global projects, specific business models in selected value chains were identified and analysed to ascertain their technical as well as financial profitability and to determine the financing needs.

Detailed sector, market and value chain analyses were supported by a comprehensive excel model, which delivered hard calculations for altogether ten identified business models in both countries. The findings along with business models explaining the rationale and specifics as well as financing needs of proposed investments were then presented and discussed with financial institutions and other relevant value chain stakeholders in the countries. The participants showed great interest in the approach and apart from validating the overall findings, provided valuable feedback to improve practical implementation.

The project team is currently working with relevant partner financial institutions to develop financial products required for the practical implementation of identified and analysed business models. Before the end of this year, the project team will also publish six factsheets explaining in detail the set-up of analysed business models.

The project team is currently also working on developing a standardised methodology to identify, select and analyse business models, which are to serve as a basis for promoting sustainable and profitable agricultural investments. The accompanying Excel-based analysis model can be used to conduct an economic analysis of selected business models to assess their profitability and generate the required “economic evidence” for financial institutions interested in financing agricultural investments.


For more information, please contact

Gert Reinberger, Project Leader GV AgFin
Jens Windel, Advisor,
Waqas Malik, Advisor,