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Agriculture Finance




Agriculture is a major source of livelihood throughout the world, especially for the majority of poor people living in rural areas in developing countries. A key challenge for the majority of these farmers is - access to finance. Lack of access to finance is a key impediment to farmers in improving the efficiency of their productions and adopting better technologies.

The objective of IFC’s Global Agri-Finance Advisory Program is to foster a measurable increase in the availability of agriculture finance in IFC’s client portfolio globally, by promoting appropriate risk mitigation products and building necessary skills. The program cross-cuts and integrates across IFC’s investment, advisory, and regional units and it works in close collaboration with IFC’s existing pipeline of strategic agribusiness initiatives, supporting the global food security effort. The program supports IFC regional facilities and their client financial institutions with agri-finance tools and expertise, focusing on three main work areas:


• 
Building capacity of client financial institutions in agri-finance: conducting diagnostics, improving risk management systems and processes, designing new products;
Linking financial institutions to sustainable supply chains: promoting access to finance for stakeholders along sustainable supply chains; and
Linking insurance to agri-finance: bringing insurance products to address production and revenue risks, working closely with IFC’s Global Index Insurance Facility.

As agriculture sector contributes about 40% of worldwide employment and a 100% food production increase will be required in developing countries to feed the 2050 population, investment in agriculture sector is critical for driving global economic growth. The issues of food security, increased poverty in developing nations and overall imbalanced development of agriculture-dependent economies have highlighted the urgent need for development in that sector.

IFC has a broad and diverse reach in the agriculture sector and plays a unique role in helping our clients address risks and identify opportunities. Our financing and advisory services support private sector investment that applies creative solutions to complex problems.

Through our partner financial intermediaries (FIs), IFC is deeply involved in various parts of the agriculture finance chains by providing customized short and medium-term working capital as well as long-term financing. Our investments include both credit line and risk participation, and in some cases, are complemented by advisory service. Some of our recently established agriculture finance programs include Global Trade Liquidity Program (GTLP) - Food and Agri and Global Warehouse Finance Program (GWFP). IFC’s approach is innovative and aims to use banks and larger companies as intermediaries to reach small farmers and SMEs to achieve wider reach and greater development impact.

The objective of IFC’s Global Agri-Finance Advisory Program is to foster a measurable increase in the availability of agriculture finance in IFC’s client portfolio globally, by promoting appropriate risk mitigation products and building necessary skills. The program cross-cuts and integrates across IFC’s investment, advisory, and regional units and it works in close collaboration with IFC’s existing pipeline of strategic agribusiness initiatives, supporting the global food security effort.

The program supports IFC regional facilities and their client financial institutions with agri-finance tools and expertise, focusing on three main work areas:

• Building capacity of client financial institutions in agri-finance: conducting diagnostics, improving risk management systems and processes, designing new products

• Linking financial institutions to sustainable supply chains: promoting access to finance for stakeholders along sustainable supply chains; and

• Linking insurance to agri-finance: bringing insurance products to address production and revenue risks, working closely with IFC’s Global Index Insurance Facility.


 

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