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
- Knowledge management and transfer of know-how
- Supporting the demand side
- Supporting the supply side.
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 Gert.firstname.lastname@example.org
Jens Windel, Advisor, Jens.Windel@giz.de
Waqas Malik, Advisor, email@example.com