Independent Magazine - issue 12

Agribusiness micro, small and medium enterprises are the lifeblood of global food systems

A“gribusiness micro, small and medium enterprises are the lifeblood of our global food systems. They play a pivotal role in ensuring food security, fostering sustainable development and uplifting rural economies. However, these enterprises often face significant challenges and barriers in securing the financing that they need to thrive due to limited collateral, high perceived risk and insufficient credit history”, stated Dr Véronique Salze-Lozac’h, Chief Evaluator at the European Bank of Reconstruction and Development (EBRD) in her keynote address during learning event hosted at IFAD headquarters, on 7 March 2025.

Titled ‘Lessons on financing the private sector with a focus on micro, small and medium enterprises (M-SMEs) Agribusiness’, the event was co-chaired by Dr Salze-Lozac’h and Dr Indran A. Naidoo, Director of the Independent Office of Evaluation of IFAD (IOE), and was co-organised by IOE and the Independent Evaluation Department (IEvD) of EBRD in the framework of the Spring meeting of the Evaluation Cooperation Group (ECG). Over 200 people attended the hybrid event, including staff members from IOE and IFAD Management, representatives of IFAD governing bodies, representatives of multilateral development banks (MDBs) and other IFAD stakeholders participating in-person and joining on-line. Dr Kouessi Maximin Kodjo, IOE Lead Evaluation Officer moderated the discussions, which also featured the contribuitions of Rick Van Der Kamp, Lead Global Technical Advisor, Markets and Value Chains at IFAD.

“MDBs remain vital financing partners of M-SMEs. However, addressing gaps in effectiveness, addressing additionality and refining evaluation approaches will be essential for achieving meaningful outcomes. MDBs must go beyond financial additionality and adopt a holistic approach by enhancing non-financial support and enabling the conduct of robust monitoring mechanisms to collect data and results at the beneficiary level”, highlighted Dr Naidoo.

The event expanded participants’ knowledge, particularly that of IFAD stakeholders, on perspectives and outcomes related to financing private sector actors by MDBs. In this regard, discussions fostered an exchange of experiences between the participating organizations, leveraging evaluative findings to address approaches, results, and challenges in financing agribusiness micro, small and medium size enterprises (M-SMEs), and their contribution to development effectiveness.

“Financial institutions may view these businesses as too risky, too vulnerable to factors like climate change and market volatility. But how is not? Complex norm requirements and high interest rates can limit access to formal financing”, further explained Dr Salze-Lozac’h.

The event featured two panel discussions. During the first, Andrew H. W. Stone, Adviser to the Director for Finance, Private Sector, Infrastructure and Sustainable Development, at the Independent Evaluation Group of the World Bank, presented lessons in terms of approaches and results of MDB’s support to agribusiness M-SMEs, considering financial, technical, infrastructure, competitiveness, and policy aspects. The discussions that followed zoomed in on possible solutions and innovations could be applied in financing agribusiness M-SMEs to enhance and sustain their performance.

During the second panel, Gabriele Fattorelli, Director for Corporate, Thematic and Knowledge Evaluation at the EBRD, narrowed the focus on key aspects of success and challenge of MDB support to agribusiness M-SMEs, to promote their contribution to development effectiveness. This presentation sparked subsequent discussions on lessons related to evaluation methodology and findings in assessing MDB’s additionality in financing M-SMEs.

Dr Kouessi Maximin Kodjo, IOE Lead Evaluation Officer, facilitated a lively questions and answers sessions, prior to the closing remarks delivered by Dr Naidoo, who brought the event to a closure.