Credit for purchasing farm inputs and funding new businesses
Financing is a major barrier to growth in Africa’s agriculture sector, particularly when it comes to smallholder farms. Interest rates in several countries are extremely high, up to 47 percent. Farmers and businesses often lack collateral and banks struggle to price the risk of loans to smallholder farmers and small to medium-sized agribusinesses.
Less than 3% of total bank lending in Africa goes to a sector that accounts for about 70% of all employment and over 40% of the GDP.
What we’re doing
AGRA is committed to unlocking financing for family farmers and small agricultural businesses by pursuing partnerships that can overcome concerns about risk that have limited business opportunities for smallholder agriculture in Africa.
- We unlock credit for smallholder farmers by investing in loan guarantee funds that can be used to leverage much larger loans from commercial banks.
- We train farmers and farmer organization in financial literacy.
- We partner with financial services providers to develop and offer affordable and appropriate saving, borrowing and insurance products.