GOPA AFC Agricultural Finance Brochure

GO

PA

AFC

Agricultural Finance GOPA AFC Your partner in providing tailored advisory services in agricultural finance around the world

MEMBER OF GOPA CO NSULT ING GR O UP

Why Agricultural Finance Matters The Agriculture Sector is the backbone of many economies, particularly in developing countries and transitioning economies, where it provides employment for the majority of the population and contributes significantly to the GDP. In Sub-Saharan Africa, for example, agriculture contributes 15% of total GDP and employs more than half of the total labor force2.

In 2050, the global population will be at

9.7 billion people

84% 608 million farms worldwide (FAO)1

of all farms are small farms with less than 2 hectares

Leading to an increased demand for food

2 billion people depend on small farms for their livelihoods (IFAD)2

Small farms produce about 35% of the world’s food Although, they operate only 12% of all agricultural land

However, farmers and agribusinesses often face various challenges, such as unpredictable weather, pests and diseases, and price volatility, which can affect their income and ability to access finance. Agricultural finance helps to mitigate these risks and enables farmers and agribusinesses to invest in their businesses, expand their operations, and improve their livelihoods, to promote sustainable and inclusive agricultural growth. Hence, agricultural finance is essential as it plays a vital role in the economic development of rural communities, food security, and poverty reduction.

Investing in the agricultural sector and its infrastructures can help in coping with vulnerability, enhancing labor productivity, supporting local farming and accessing new markets. That is why agricultural finance plays a vital role in strengthening resilience and in proposing sustainable solutions, respecting local communities and ecosystems. Adequate financial services are necessary for small and medium farmers as well as for agricultural enterprises. Moreover, climate change and ensuing extreme weather events will require investments for adaptation and mitigation.

However, agriculture remains a “risky business” and (micro) financial institutions, often unfamiliar with the sector, tend to be reluctant with their investments, resulting in a lack of access to finance for many farmers and agri-enterprises. According to the International Institute for Sustainable Development, an annual investment of USD 265 billion is needed globally, to achieve the sustainable development goals on ending poverty and hunger. USD 140 billion of this investment must focus on agriculture3.

1

2 3

2

FAO: Lowder, Sánchez, Bertini: “Which farms feed the world and has farmland become more concentrated?”, World Development, Volume 142, June 2021, 105455.

IFAD: “Smallholders can feed the world”, Viewpoint, 2011.

FAO and IISD. 2020. Responsible investments in agriculture and food systems – A practical handbook for parliamentarians and parliamentary advisors. Rome. https://doi.org/10.4060/cb1991en.

How We Shape Agricultural Finance With decades of expertise and experience in the agriculture and the finance sector, GOPA AFC is in a unique position to provide consultancy services that address the challenges at the heart of agricultural finance.

What Is Agricultural Finance?

Agricultural finance is the application of financial services and products to agricultural production, processing, marketing, and trade. It includes a range of financial tools such as loans, insurance, savings, leasing, and investment, that help farmers and agribusinesses manage risks, invest in technology, and increase their productivity and profitability.

Our Tools Over the past years, GOPA AFC has developed several tools to improve agricultural lending from different angles with the aim of bridging the gap and decreasing risks for lending. We have developed:

The AgFin Score, a loan scoring tool

Two e-learning courses

A comprehensive training catalogue for financial institutions and MSMEs

3

GOPA AFC provides capacity building activities and training to financial service providers engaged in agricultural and value chain finance. We support the development and improvement of their financial products, services, and delivery channels, and conduct institutional diagnostics to improve their procedures and enhance efficiency.

Agricultural value chain finance can play a key role to leverage efficiency and enhance the quality along the agricultural value chain from production and post-harvest handling to processing, wholesale, retail, and support services such as storage and transport. We support all actors along the value chain, offer a wide variety of training to smallholder farmers and agricultural MSMEs. Further, we conduct studies of agricultural value chains and financing needs for donors and financial service providers, thereby improving informed decision-making on a policy level.

In addition, we support governments and regulators in developing an enabling environment for effective financial markets.

To improve financial inclusion in the agriculture sector, we advise the demand as well as the supply side and review policy frameworks; this way we improve the access, usage and quality of agricultural finance.

AgFin Score - Agricultural Loan Scoring Tool

The Agfin Score is an agricultural loan scoring tool, which uses a standardized methodology to pre-screen agricultural loan applications. A set of parameters covering financial performance, agricultural production, marketing conditions, and expertise provide a well-rounded assessment of applicants’ potentials and risks.

Financial institutions require efficient and reliable procedures and tools in order to achieve the necessary cost reductions to scale up agricultural lending to farmers and agribusinesses. From our experience, the loan appraisal process generates a lot of challenges and results in increased credit risk and decreased loan portfolio performance. The result: agricultural finance is perceived too difficult, too risky and altogether too costly. Therefore, GOPA AFC developed the “AgFin Score”. The tool supports loan officers and credit committees in streamlining the first steps towards successful agricultural lending, facilitating the pre-screening of potential clients. The tool consists of an easy-to-use interface for data entry by the loan officer. Subsequently, input data is processed automatically and summarized in a dashboard.

The dashboard’s benefit lies in its standardized and immediate display of priority indicators, which improves the accuracy and speed of evaluating large numbers of applications. In addition, the tool points towards red flags and areas for further investigation and thus serves as the starting point for an indepth analysis of strong applications.

The tool can be easily tailored to specific country contexts and value chains, in order to enhance its accuracy. Moreover, it can be integrated into the financial institutions’ MIS systems.

It is our vision for the AgFin Score tool to be linked to a cumulative database of agricultural loans; this would mean that the benchmarks used for the decision become stronger and stronger over time.

SUCCESS STORY

Financial Training and Loan Benefitting Entrepreneurs in Georgia Giorgi Mshvenieradze participated in one of our financial literacy trainings, in Tbilisi.

"We were able to develop a better and more efficient business model as well as a future strategy. For the year 2022, at our winery, we planned to produce sparkling wines, up to 600 bottles. For this purpose, we were able to attract a small grant from Enterprise Georgia and could buy necessary equipment. As planned, we were able to successfully sell all our stock of sparkling wines in the same year. At the same time, we developed a business plan for the new business line in our Marani [wine cellar]. In 2023, we plan to receive guests for wine and food experience. For this we applied for a loan to the Bank of Georgia, in the amount of GEL 50 000 [around EUR 18,000]. The loan was approved and we will soon offer new wine tasting services as well as one guest room for our visitors.”

The EIB Eastern Neighbourhood Technical Assistance Programme for Financial Inclusion (ENTAFI) supports selected partner financial institutions of the EIB in financing MSMEs in Georgia, Moldova and Ukraine.

4

Agricultural Finance E-Learning Course Samuel Darko GOPA AFC Finance Expert, February 2023

“I have learnt great skills in the loan appraisals of agriculture clients of a bank.

The aspect that really stood out was the topic of Agric value chain financing model, and Agric finance risk assessment.

Particularly interesting was the simplistic explanations and examples on the value chain financing- thus, the warehouse receipt financing, and the tripartite agreement options under the value chain financing models.

For the past two years we have been successfully using our interactive e-learning course “Introduction to Agricultural Finance for Bankers” in various projects for further qualification of our project staff and partner financial institutions. The e-course targets loan officers of commercial banks and MFIs, who want to be equipped with the basic principles of agricultural finance and its operational approaches. The course is structured in four modules that are rich with real life examples, have questions for learners to reflect on and provide additional sources for further reading.

It covers an introduction to the agricultural and agribusiness sector, adequate risk management, credit management (the full lending cycle), and financial products and innovations in agricultural finance.

The knowledge acquired will practically assist me during needs assessment stages with clients-partner financial institutions on any project relating to Agri-SME financing. The training is quite relevant, especially with the quizzes. They ensure you get better understanding for each model before graduating to the next model.”

The main objectives of the course are to enable learners to:

Identify promising business opportunities in the agriculture & agribusiness sector.

Scan the QR code for more information

5

Conduct the steps of the credit cycle.

Assess & manage risks for individual borrowers & the loan portfolio as a whole.

Recommend the most suitable product to an agricultural client.

“The E-learning, course enhanced not only our understanding, but also our appreciation of the aspects related to the challenges emanating from climatic change and continued biodiversity degradation. The course further stimulated our and my awareness, of financial players’ critical role in regard to actively participating in interventions geared towards environmental (biodiversity) conservation, so as not only to guarantee sustainability of communities, but also their (Financial players) future survival.”

Kayita Dan Davis Lule Agriculture Lending Manager, Finance Trust Bank, Uganda, October 2022

Climate finance, resilience & financing for biodiversity – our e-learning course for agricultural finance enhancement Apart from the e-learning course on Agricultural Finance and linked to the topic, we further developed an e-course on Climate Finance, Resilience & Financing for Biodiversity (accessible online or via the QR code). The course can be flexibly structured and studied at own pace; in total it takes about 8-12 hours.

Since 2021, GOPA AFC has been supporting the East African Development Bank and KfW in on-lending climate smart biodiversity finance to the private sector in Uganda. As part of the Agrifinance Enhancement Programme, we trained bank staff using our newly developed e-learning course.

Value Chain Finance Webinars Topics The interactive modules attracted more than 800 participants and covered topics such as:

Value chain analysis and mapping

Financial products & innovations in VCF

Risk mitigation products in VCF

Digital financial services in VCF

Women’s access to financial services

6

We developed further online training formats to flexibly reach participants.

The improvement of webinars resulted and proved to be successful in reaching a large number of participants from different sectors. Post-pandemic, this online training format is further developed and improved. For a GIZ project in Egypt, we developed a series of 10 webinar modules on “Value Chain Finance” (VCF) to reach a large target group from the financial sector. Promoted through the Egyptian Banking Association, the ten webinars focused on introducing the concept of value chain financing.

The concept of the webinars was to provide a perspective of the entire value chain as opposed to a single borrower. One of the major learnings of the series has been that financial flows within the value chain are supposed to generate information flows to the mutual benefit of the financial institution and the value chain actors. They can be used for stabilizing and protecting the value chain as well as for appropriate product design of value chain products.

The large audience and positive evaluation emphasized the relevance of the webinar series and the topic itself.

SUCCESS STORY

Biodiversity Financing in Uganda On her over 25 acres of land in Bbaale, Annet Mbabazi farms fruit and vegetables, such as watermelon, pineapples, green pepper, Matoke bananas, and eggplants. The biggest climate issue Annet’s business faces is drought; especially in the dry season, when the water supply is so low that her crops are failing to bring yields.

Therefore, she received a loan of UGX 15 million (around EUR 3,900) from the Biodiversity Financing Facility (BFF), to buy mulches and coffee husks for the gardens. These mulches help to keep water in the soil, so it remains wet and fertile. Mulching her gardens turned out to be very successful, resulting in high yields of her watermelons. In addition, she acquired a water pump, to irrigate her crops during dry season.

“I further planted more trees in my garden to provide shade and employed more female workers. I’m now trying to save some of my additional income to buy a solar water pump, as an additional measure to cope with the dry season”, she says.

In the frame of the BFF project funds are made available from the BFF by KfW, through the EADB, to the partner financial institutions; they in turn onlend the BFF products to eligible clients.

7

Agricultural Finance Training Package Agricultural Finance Training Over the course of the years, GOPA AFC has conducted a range of training modules in agricultural finance for financial institutions and final beneficiaries, such as agricultural MSMEs and farmers.

We have built up a set of training materials that serve as the technical starting point for the development of tailored training. Based on thorough training needs assessments, our teams adjust the stock of material to the needs and environment of training participants, ensuring targeted training at the highest technical level, while following best practices for adult learning.

Topics Understanding agricultural value chains

Agricultural value chain analysis

Financing instruments for the agricultural value chain

Agricultural risk analysis & management

Agricultural mechanization – understanding the opportunities

Agricultural asset finance

Agricultural credit management

Agricultural cash flow analysis

Crop and livestock specific financing opportunities and challenges

Understanding guarantee schemes

Sales and marketing for agricultural finance

Leasing in agricultural finance

Agricultural insurance

Digital services for agricultural finance

How We Promote Agricultural Finance around the World Kazakhstan Uzbekistan Georgia

Tajikistan

Kyrgyzstan

Ukraine

Moldova

Tunisia

Niger

Egypt

Burkina Faso

Laos

Ethiopia Côte d’Ivoire Uganda

Somalia

Papua New Guinea

Ghana Togo

Kenya

Nigeria

Madagascar

DR Congo

Mozambique Tanzania

Zambia Rwanda

PRODUCTS DEVELOPED

8

TRAININGS AND CAPACITY DEVELOPMENT PROVIDED

Malawi

MSME TRAININGS

STUDIES

FINANCING INSTRUMENTS

POLICY FRAMEWORK SUPPORT

DIGITAL TOOLS

Our Approaches

PRODUCTS DEVELOPED

We adapted, developed and implemented new agricultural finance products, including working capital loans and investment loans for producers and processors in different value chains, tripartite agreements, an aquaculture loan product, and four Shari’a compliant products.

We designed an eco-loan product for green lending to businesses.

Our experts developed an index-based climate risk insurance product.

TRAININGS AND CAPACITY DEVELOPMENT

We provided training for bank officers of commercial banks and micro finance institutions, among others in agricultural lending (e.g. credit scoring in the granting of agricultural loans), product development and marketing, climate risks, and agriculture value chain finance.

Trainings were provided online in the form of e-courses or webinars.

Moreover, we advise banks on agricultural finance business models and provided capacity building in the areas of: analyzing business models in value chains, green finance, institutional change management process, for selected BDS companies, and development of economic models.

In the majority of projects we are providing MSMEs and farmers with training in financial literacy and management. Further we offer business development services for MSMEs, pitching to financial institutions and overall financial management trainings for businesses, e.g. in business planning, and credit applications.

MSME TRAININGS

Other topics are value chain finance, micro insurance, improving production quality, farm management, marketing, tapping into export opportunities, saving for investment or good agricultural practice.

Besides trainings, workshops, study & practice tours, and internships can be organized.

STUDIES

FINANCING INSTRUMENTS

For several of our projects we conduct a value chain analysis at the beginning of their implementation, to gain a comprehensive understanding of the various stages involved in the production, processing, and distribution and identify potential opportunities for improvement.

Furthermore, we assess the potential of and need for agriculture lending and conduct studies to assess the demand for and supply of agriculture financing and likewise for insurance. We assess the feasibility of innovative financing products and provide recommendations to financiers.

We have gained extensive experience in implementing projects with matching grant funds, who are made available to MSMEs and smallholders or a disposition fund for financing agricultural equipment.

We support project implementation units and other stakeholders in managing the calls for participation, conduct awareness campaigns and support the preparation of applications for actors along the value chain.

Over the past decades, we have managed and established revolving loan funds and acted as fund managers for donors and apex institutions. Moreover, we develop concepts for contract farming and manage support funds for small and medium investments.

We ensure to build upon national policy frameworks and align our activities accordingly or even provide recommendations, e.g. on trade policies, legislation for organic agriculture, and subsidies.

POLICY FRAMEWORK SUPPORT

DIGITAL TOOLS

9

For example, we develop an implementation road map for national agriculture strategy in the fields of seedling development, greenhouse expansion, processing enhancement, quality improvement, and logistics improvement.

In order to increase the efficiency in agricultural finance we aim to deploying digital tools when apt. For instance, we digitized the SME lending process, developed a platform tool, to identify trained needs and deliver demand-based trainings and deploy digital solutions for agricultural finance products, e.g. ATMcards, USSD-communication.

Our Key Agricultural Finance Projects of the Last Five Years Burkina Faso Strengthening agricultural promotion services in the rice, cassava and soya value chains (GIZ) Côte d’Ivoire Green innovation centers for the agricultural and food sector: sustainable and deforestationfree cocoa industry (GIZ) Egypt Private sector development and innovation: value chain financing (GIZ) Ethiopia Study to identify barriers to agricultural finance for SMEs in Ethiopia (GIZ) Ghana Market oriented agriculture (GIZ) Kazakhstan German-Kazakh agricultural dialogue (BMEL) Kenya, Rwanda, Tanzania, Uganda Agricultural finance with East African banks (Aceli) Kenya, Rwanda, Uganda, Tanzania, DR Congo, Somalia Technical assistance to various EIB financial sector operations (EIB)

10

Kyrgyzstan Value chain agro finance (KfW, EIB, EU) Laos Climate-friendly agribusiness value chains sector: financial management entity (ADB) Madagascar Adaptation of agricultural value chains to climate change and climate risk insurance (GIZ) Malawi, Kenya Matching grant facility (KfW) Moldova Support the implementation of the “Fruit Garden of Moldova” operation, and the beneficiary SMEs (EIB)

Rwanda Agricultural value chain analyses for the Development Bank of Rwanda (AATIF) Tajikistan Value chain agro finance (KfW) Tajikistan Grant management (WB) Togo Rural development and agriculture (GIZ) Tunisia Access to finance and investments for farmers (GIZ) Uganda Support for refugees and host communities: agriculture (GIZ)

Mozambique Financial system development (GIZ)

Uganda Agri-finance enhancement: biodiversity financing facility (KfW)

Niger Support to private sector, business environment, regulation of financial services (EU)

Ukraine, Moldova, Georgia ENTAFI – Technical assistance to microfinance operations (EIB)

Nigeria Promotion of agricultural finance for agri-based enterprises in rural areas (GIZ) Papua New Guinea Market for village farmers (IFAD)

Uzbekistan Horticulture value chain promotion (JICA) Zambia Wholesale agriculture value chain finance products for three agriculture value chains (IFAD)

A Selection of Our Agricultural Finance Projects Papua New Guinea

IN FOCUS

Agriculture Loan Product for Farmers in Papua New Guinea

Project Market for village farmers project in Papua New Guinea 02/2021 – 01/2024 Donor IFAD

More information Read our article about the project, some news from the field or about the newly developed agriculture lending for farmers product.

Services delivered

The project aims to improve the livelihoods of village farming households, by facilitating their access to affordable and diversified financial services and this way promoting their transition from semi-subsistence agriculture to marketoriented production.

The project team supports nine financial service providers in providing affordable and diversified financial services for the agricultural finance value chain participants: farmers, suppliers, buyers, producers. Jointly, we developed an agriculture loan product for individual farmers and for SMEs— used by 120 farmers now— as well as agriculture lending policies and procedures. It is noteworthy that no single bank funded individual farmers up to the start of the project. In preparation, an agriculture lending demand survey was conducted, which showed high demand in agriculture lending, especially in the fresh vegetables sector.

Moreover, we are improving the agent banking and digital finance technologies at the PFIs, and trained more than 80 staff of nine partner financial institutions in:

Agricultural finance

11

Business plan development

Product development and marketing

Agriculture lending

Tajikistan Uzbekistan

Kyrgyzstan

IN FOCUS

Value Chain Agro Finance in Tajikistan, Kyrgyzstan, and Uzbekistan

Project Value chain agro finance in Tajikistan 05/2021 – 04/2024 Donor KfW

More information Read our news about training with financial institutions, and product development, our article on trainings, or our post about the signing ceremony.

Services delivered

The project aims to increase the competitiveness of Tajik agri-food products on local and regional markets, by creating and supporting selected value chains in the production of competitive agri-food products in a sustainable way and by promoting the use of good agricultural practice and best available techniques in processing and distribution. For that purpose working capital finance as well as long-term finance in local currency is provided for agricultural equipment and machinery.

After having selected suitable partner financial institutions (PFIs), our team on the ground is now assisting the PFIs in improving their agricultural credit technology and business models, in order to guarantee the sustainable extension of long-term loans. Further, we are introducing an environmental and social management system (ESMS). In addition, we identify commercially viable agricultural value chains and finance gaps and design matching products for agro value-chain finance, e.g. working capital and investment loans. Since the beginning of the project, 852 loans were issued by 5 PFIs. Besides, we improve operational structures at the PFIs and trained 278 loan professionals in agricultural value chain finance.

Prior a value chain analysis study was conducted to select a specific list of value chains that make a significant contribution to diversification, competitiveness and employment. For PFIs, focusing on specific value chains, for this SME lending program, helps to clearly communicate new financing opportunities to the business community. In addition, the development and implementation of capacity development measures for participants in the value chain, as well as for credit professionals, becomes easier and clearer if

12

“АFС reliably supported us in designing appropriate аgri-МSМЕ loan products, in improving our agricultural business models, and introduced credit risk assessment methods. Jointly, we successfully implemented аn environmental and social management system. They further provided us very insightful trainings in credit risk management methods for agri-lending.

In addition to that, АFС is continuing to support us in the implementation of the ongoing projects by conducting monitoring, defining eligible subborrowers, managing disbursement and repayment processes of loan tranches.

We appreciate the fruitful and productive cooperation with АFС.”

Fiгdаvs Mayunusov, General Director, CSJC MDO, Dushanbe, Tajikistan, December 2022

several value chains are selected. Moreover, standard financial products can be developed for specific value chains that do not require individual profitability checks, while reducing transaction costs and realizing economies of scale; such loans can be issued faster and at lower cost.

Moreover, we will be providing business planning and credit application training to agricultural SMEs including the establishment of best agricultural practices.

In April 2023, GOPA AFC started implementing another Value Chain Agro Finance project in Kyrgyzstan, cofinanced by the EU, EIB and KfW. The project aims to strengthen existing agricultural value chains in the Kyrgyz Republic by supporting the adoption of best agricultural practices, competitive post-harvest handling methods and access to long-term finance for small and medium-sized agro-industrial enterprises in the Kyrgyz Republic. A thorough needs assessment of five key value chains analyses the specific financing needs and thus enables our partner financial institutions in improving and adapting their financial product range.

Read more about the kick-off meeting and first stakeholder workshop

Our Horticulture Value Chain Promotion Project in Uzbekistan, funded by JICA, seeks to bolster the horticulture sector. It improves financial access to horticulture growers and agro-related businesses through partner financial institutions, enhances management skills of farmers and agro-related companies, promotes the export capacity of horticulture crops and attracts modern production and processing technologies to the country.

Having started in August 2023, we will promote the environmental and social management of partner institutions and women’s participation in the economic life, as well as support the implementation of the national agriculture strategy in areas of seedling development, greenhouses, processing, product quality improvement, and logistics.

Have a look at our news from the kick-off meeting 13

IN FOCUS

Climate Friendly Agribusiness Value Chains in Laos

Project Climate friendly agribusiness value chains sector project: financial management entity (FME) in Laos 01/2020 – 01/2023 Donor ADB

More information Read our post about one of the field missions.

Services delivered

Laos

The Laotian agribusiness sector is dominated by family-owned SMEs, which are severely constrained in their growth due to the challenges in access to finance. The project seeks to improve agricultural competitiveness by developing productive and resource efficient agribusiness value chains in project areas. A key strategy is to lower the risk averseness of the financial sector and improve the access to finance at both the SME (processor/consolidator) and producer (farmer) levels. Our promotion of climate friendly investments will modernize value chains and increase their competitiveness, eventually benefiting the smallholder farmers. Thereby, we focus on environmentally sustainable technologies to gradually shift towards climate friendly technologies in the agricultural sector.

We manage two financing schemes under this project namely, Matching Grant Scheme (MGS) and Smallholder Finance Scheme (SFS). MGS targets qualified agribusinesses in the rice, vegetable and bio fertilizers value chains whilst SFS focus is on farmer collectively as Agricultural Production Groups (APGs). In addition, we are implementing a green finance capacity building program for the Laotian financial sector, to create awareness of opportunities and risks in agri-business sector and risk management strategies.

To date, 22 SMEs have been shortlisted for matching grants totalling USD 2.74 million. All SMEs have received awareness training and, in some cases, BDS support in business planning. Under the SFS, 1,298 farmer-households have been shortlisted for grants worth USD 1.25 million. In preparation as a pre-requisite, all have received training and coaching in financial management, group management, climate smart agriculture.

In addition, the GOPA AFC team conducted a study to identify the potential of introducing climate insurance as a tool for climate risk mitigation. It identified the relevance of weather index insurance in Lao context and will lay the foundation for discussion on policy and future actions.

14

IN FOCUS

Madagascar

Insurance for Agricultural Value Chains in Madagascar

Project Adaptation of agricultural value chains to climate change (PrAda) in Madagascar 07/2018 – 11/2022 (Phase I) 12/2022 – 06/2025 (Phase II) Donor GIZ

More information For more information read our post on the project start, the news about the project extension, our article about the drought insurance product, or learn more about the predecessor project.

Services delivered

15

Climate change is a significant threat to rain-dependent agriculture in southern Madagascar. Our experts are addressing this by improving the resilience of agricultural actors through better access to financial services. This enables them to adapt to climate change and manage production risks.

In the initial project phase, we introduced an innovative weather index-based insurance (WIBI) product, a first for Madagascar. This included refining the legal framework for insurance, collaborating with a local insurance company to pilot the WIBI product for southern farmers, and using communication strategies to raise farmer awareness about its benefits. Significant progress was made, with revisions to the insurance legal code and capacity-building for regulators. The development of the WIBI product used advanced techniques, including satellite data and on-field data collection.

~500

6,000

premiums sold within the peanut value chain during the initial phase

farmer households in 32 communes across target regions were trained

Training on insurance concepts related to climate risk coverage

The current second phase of the project aims to enhance financial inclusion for beneficiaries and expand the WIBI product, including adapting existing financial services, raising awareness through financial education, and expanding coverage to an additional region and agricultural value chains. We expect to directly impact 17,500 beneficiaries, with a focus on women and connecting Village Savings and Loan Associations with banks and microfinance institutions.

IN FOCUS

Linking Farmers to Financial Institutions in Nigeria

Nigeria

Project Technical cooperation with the global project “Promotion of agricultural finance for agri-based enterprises in rural areas (AgFin)”: Implementation of country package Nigeria 11/2018 – 07/2022

Donor GIZ

More information Read our articles about Islamic finance for female rice processors, the Viamo surveys, a farmer success story, the workshop on the project’s results and learn more about the project impact or watch our SME finance trainings video.

Services delivered

The main objective of the project was to link smallholder farmers and agribased enterprises in selected regions of Nigeria to financial service providers.

We developed locally adjusted trainings on agriculture finance and business, for farms and agri-based enterprises as well as supporting tools to analyse and identify profitable agricultural business models. As a result, 8,460 smallholder farmers and 1,872 managers of agri-based enterprises (mostly female rice processors) were trained; about half of them received support in opening a bank account. In addition, our team developed trainings on agricultural value chain finance for commercial and micro-finance banks. 100 staff of seven commercial and MF banks were trained— in classrooms and on-the-job— in agricultural lending.

Moreover, we supported seven commercial and microfinance banks to review and adapt 15 loan products to finance working capital for farmers in each of the target value chains as well as rice processors— the vast majority of these are women. Six of these agricultural finance products deploy digital solutions, e.g. ATM-cards, SMS-communication between customer and bank, etc. Moreover, the banks provided savings products to the smallholder farmers. About half of them, in particular women, opened bank accounts for the first time in their lives.

“AFC’s support and training in developing the Murabaha product for agriculturalists has been impactful for our bank: We reduced the approval process and time for agricultural facilities.

Our staff now successfully negotiates with input suppliers, which greatly reduces the cost of production. E.g. rice farmers under Murabaha save between 10 and 14% - fixed profit of our bank included – compared to buying seeds on the open market.”

Abubankara Makinta Head of Agricultural Finance, Jaiz Bank Plc, Nigeria, February 2020 16

SUCCESS STORY

Agricultural Finance Project in Nigeria – A Rice Farmer’s View GOPA AFC: Umar Muhammed, what do you do for a living?

Umar: My main occupation is rice production. I cultivate both dry and rain-fed rice and sell the paddy after harvest.

GOPA AFC: You participated in our finance for farmers training. What impact did the training have on your farming business?

We successfully implemented the project “Promotion of Agricultural Finance for agribased Enterprises in Rural Areas (AgFin)” in Nigeria on behalf of GIZ. After project completion, we talked to Umar Muhammed, one of the targeted farmers, in Kura, Kano State, to see how he was impacted by our project activities.

Umar: The training has enabled me to plan to separate my profit from my capital and how to save after the season’s harvest. I adopt good agronomic practices in all my farms.

GOPA AFC: You further received a Murabaha loan from our partner JAIZ Bank. What improved for you since then?

Umar: A lot of things have improved. I am now able to increase in farm size, thereby increasing my income. The number of hectares I grow increased and my income doubled.

Accessing the second loan became easier than the first time. I plan ahead and put savings aside for reinvesting into the farm.

Our Strong Network Benefitting from Our Consulting Group’s Synergies As a member of GOPA Consulting Group (GCG), since 2007, we benefit from being associated to Germany’s largest group of consulting firms in development cooperation, which combines various technical specialists under one roof. GCG comprises 28 companies all over the world.

“Working with GOPA GIWA guarantees the same quality of service you get in all our companies, based on the Group performance and compliance standards we are all committed to.”

Houseine Diabaté Director Africa

17

An important partner from this network is GOPA Group International - West Africa SAS (GOPA GIWA), located in Cote d’Ivoire. The office is the result of a long-term presence strategy in the West African region and brings us even closer to our clients and development partners.

Another important member of GCG is CAIConsulting, owned by GOPA AFC, with its head office in Kyrgyzstan.They represent a network of local offices throughout the Central Asia Region and thrive to offer the best international and local specialists in Central Asia. They implement projects in six different sectors, one of them “agricultural, rural and environmental development”.

Apart from that, GOPA AFC has strong connections to the International ValueLinks Association, an independent network of practitioners working on value chain development and applying the methodological approach ValueLinks. Several GOPA AFC staff members are trained in ValueLinks and can apply this approach, which also focuses on value chain financing solutions and risk management.

GOPA AFC is official sponsor of the German-African Agribusiness Forum, organized by the Afrika-Verein der deutschen Wirtschaft (German - African Business Association). Furthermore, we participate in various local forums and conferences and thus ensure a strong commitment to local developments.

About GOPA AFC Our Impact Thanks to our in-house experience and the expertise of our multidisciplinary teams, we offer our clients effective, operational and pragmatic approaches, based on our detailed knowledge of their challenges and local contexts.

Around 1,300 staff members implemented 100 projects (in 2022), building up local capacities for sustainable development in Africa, Asia, CIS countries, Europe, the Middle East and Latin America.

18

We are a private German consulting company, based in Bonn, and a member of GOPA Consulting Group. For 50 years, we have been offering high-quality advisory services, focusing on two sectors: agricultural/ agribusiness and financial sector development projects in developing and transition countries around the world.

Selection of Our Clients Aceli Africa | Alliance for Financial Inclusion (AFI) | Asian Development Bank (ADB) | EFSE Fund | European Bank for Reconstruction and Development (ERDB) | European Commission (EC) | European Investment Bank (EIB) | German Agency for International Cooperation (GIZ) | GGF Fund | Green Climate Fund | International Fund for Agricultural Development (IFAD) | International Finance Corporation (IFC) | Japan International Cooperation Agency (JICA) | German Bank for Reconstruction and Development (KfW) | World Bank (WB)

GOPA AFC Projects in 2022

54

COUNTRIES*

100

PROJECTS PROJECT COUNT PER REGION

1,302

21

43 AFRICA

ASIA

MENA

21

EUROPE AND THE CAUCASIAN COUNTRIES

12

3

LATIN AMERICA

STAFF

59

IN-HOUSE

STAFF

101

88

International long-term experts

1,243 STAFF PROJECT

526

National short-term experts

OFFICES ABROAD 196

Administrative staff

BONN, GERMANY

HEADQUARTER

213

International short-term experts

220

National long-term experts

*Albania, Algeria, Argentina, Armenia, Bangladesh, Benin Botswana, Burkina Faso, Colombia, DR Congo, Côte d´Ivoire, Egypt, Ethiopia, Georgia, Germany, Ghana, India, Iraq, Israel, Jordan, Kazakhstan, Kenya, Kyrgyzstan, Laos, Lebanon, Lithuania, Lybia, Madagascar, Malawi, Mali, Mauritania, Moldova, Morocco, Mozambique, Niger, Nigeria, Pakistan, Palestine, Papua New Guinea, Paraguay, Rwanda, Senegal, Sierra Leone, Syria, Tajikistan, Tanzania, Thailand, Togo, Tunisia, Turkey, Uganda, Ukraine, Uzbekistan, Zambia.

19

Our In-House Agricultural Finance Experts

Mareike Decker Senior Project Manager, Financial Sector Development Mareike.Decker@gopa-afc.de

Benedetta Ferraro Project Manager, Financial Sector Development Benedetta.Ferraro@gopa-afc.de

Nina Kristin Thurn Deputy Director of Department, Agriculture & Agribusiness NinaKristin.Thurn@gopa-afc.de

Agnieszka Windel Senior Project Manager, Financial Sector Development Agnieszka.Windel@gopa-afc.de

We advise financial sectors. We shape development.

Let us stay connected #AFCFinDev #AFCAgri Follow us on LinkedIn to stay up-to-date about our activities around the globe

Published in November 2023

AFC

GO

PA

vironmenta l En

Baunscheidtstr. 17 53113 Bonn, Germany

+49 (0) 228 92 39 40 00 info@gopa-afc.de

www.gopa-afc.de Ma

nage men

t