Agriculture is a leading source of employment & GDP in Africa - - PowerPoint PPT Presentation

▶

Jun 01, 2023 6 likes •79 views

Agriculture is a leading source of employment & GDP in Africa but under-invested by private sector & government 70% of Africans depend on agriculture for livelihoods and ag accounts for 25% of GDP BUT < 4% of national budgets go

SLIDE 1

Agriculture is a leading source of employment & GDP in Africa but under-invested by private sector & government

70% of Africans depend on agriculture for livelihoods and ag accounts for 25% of GDP
BUT <4% of national budgets go to agriculture (v. 10% CAADP target for gov’t spending)
<5% of commercial lending to agriculture sector
Agricultural finance gap of $180B/year in Africa (75% of total market size)
30%+ is for small & medium enterprises (SMEs) in the “missing middle”

SLIDE 2

Investing in SMEs along agricultural value chains will benefit smallholder farmers, create jobs & strengthen food security

Only 20% of African farmers use improved seed African yields for staples ~1/3 global avg 20-50% of crop lost from farm to market Africa’s food imports expected to triple to $100B+ by 2025 <30% of industrially milled maize in Africa is fortified

Inputs Primary Production Post-Harvest Processing Distribution & Consumption

Higher & more stable farmer incomes
Job creation
Opportunities for women & youth
Food security & nutrition
Economic growth & resilience

Financing inclusive SMEs along agricultural value chains leads to

SLIDE 3

Founded in 1999, nonprofit to address market failure
Loans ($100k-$2M) & financial training to agricultural SMEs in Africa, Latin

America, and Indonesia

Scale
$100M lending/year to 200 businesses reaching 600,000 farmers
Historically, $1.4B lending, 500 businesses, 1.2M farmers
Impact:
Enterprise growth (25%/yr) & resilience
Market access, increased & more stable incomes (~20%)

SLIDE 4

Example: Sorghum Pioneer Agencies (SPA), Kenya

Founded in 2009 by Beatrice Nkatha, 1st loan from in 2015
SPA provides inputs, credit, agronomic extension, harvest services to farmers

(avg. 0.5 ha/farmer)

Market access: East African Breweries, World Food Programme, regional buyers
Since first loan, revenues have doubled, SPA now buys $1M annually from

8k farmers, 55% women

Farmers report income gains of 60%

SLIDE 5

Pre-competitive alliance of financial institutions to share learning and develop industry standards & best practices for lending to agricultural SMEs globally

CSAF Members & Affiliates

$716M

DISBURSED to

794

BUSINESSES sourcing from

2.2M

FARMERS

(35% WOMEN)

across

63

COUNTRIES

2017 Lending

Council on Smallholder Agricultural Finance (CSAF)

SLIDE 6

Smaller loans are less likely to be profitable than larger loans

$100k $10k $1M $10M ($100k) ($10k) $10k $100k Profitable Non-profitable Loan size Net profit / (loss) 2% 13% 29% 64% 84% $250k $500k 89% $2M Break-even

Source: data from nine members of the Council on Smallholder Agricultural Finance covering 3,500+ loans totaling $2.3B

$1k ($1k)

SLIDE 7