It might keep the world fed, but there is little appetite for financing farming and farmers. Women in farming count access to finance as top of their challenges. Many run informal businesses. Expanding them into large operations comes with a long list of demands, including access to funding, collateral, business skills and a record of farming accomplishment. Digital technologies can help to boost prospects for women agripreneurs.
Financing is one part of the agribusiness puzzle for women, but a fundamental one to growing the business and accessing effective markets, says Sabdiyo Dido Bashuna, Sr Programme Coordinator, Value Chain & Agribusiness at CTA.
Bashuna is coordinator of CTA programme VALUE4HER – a network facilitating interactions among women agripreneurs. The programme maps women agripreneurs in Africa, and links them to potential investors and buyers.
“We train women to develop the skills and knowledge to access finance; to know who the financiers are and what are the terms to access finance,” she says, explaining that women-led businesses need exposure to global markets, supply chains and investors.
“We prepare women-led businesses to become visible through digital networking, and through this financiers come in,” she says, adding that the initiative links financiers to women-led businesses that would generally not be considered bankable.
“If you look at the agricultural markets, and agribusinesses, few women are in businesses that are well positioned for investment, from the perspective of investors and bankers, because many are small and informal,” observes Bashuna. A mix of support, from business skills training to market intelligence, can do much to improve access to finance for women entrepreneurs, she says.
Through training and networking, the Africa Women Innovation and Entrepreneurship Forum (AWIEF) helps women led-businesses that are in the early stage of growth to unpack their business strategy, so as to attract investors and finance.
“Accessing finance as an entrepreneur can be daunting and a big challenge, but one must be resilient. That is the recipe for business success”, says Irene Ochem, founder and Chief Executive Officer of AWIEF.
Profitable farmer profiles
While training is key to building the capacity of entrepreneurs, a positive profile increases farmers’ prospects of accessing financing. Jamaican online start-up FarmCredibly has harnessed blockchain technology to help unbanked farmers access loans and credit. Blockchains are digital ledgers of valuable transactions, which are updated regularly and can be verified online.
Start-up founder Varun Baker says his company is helping farmers to develop their profiles based on available trade data. Through partnerships with companies, farmers do business with input suppliers, agroprocessors, hotels and supermarkets. On that basis, FarmCredibly is able to build a credit profile for the farmers, making it available to banks so that the farmer can request a loan.
Given women’s lack of land and other collateral, the Women of Uganda Network (WOUGNET) has also opted for blockchain technology to help women farmers’ access finance.
“Now we can use blockchain technology. For example, we capture farmers’ records in terms of how much land their have, their farming history, how much they have leased for productivity,” says WOUGNET founder and coordinator Dorothy Okello. “Then they have a verifiable record that can be used to raise the farmer’s credibility. Finance institutions can look at farmers in a different light, now that there is information about their capacity, even if they do not have the traditional forms of collateral like land.”
Connecting buyers and suppliers
Convinced of the power of information in enhancing agricultural development, a Dutch-based start-up is linking farmers and investors in Europe by providing value added agribusiness information to facilitate trade.
Patience Chindong, founder of EuroAfri Link, says there is an information gap among rural farmers in Africa on funding and trade opportunities. Equally, international investors interested in funding smallholder farmers or sourcing produce from Africa lack the information they need for collaboration. Using social media, EuroAfri Link has facilitated business match-making by providing useful information on African agribusiness.
In Kenya meanwhile, the Alliance for a Green Revolution in Africa (AGRA) has developed a financing mechanism, with the Agriculture Finance Corporation (AFC) providing financing to Savings and Credit Cooperatives (SACCOs), for onward lending to farmers.
Mellyne Ongango, Programme Coordinator at AGRA, said smallholder farmers prefer micro-loans, which large organisations like the AFC would not lend, but which SACCOs can. These loans are extended in kind, are easy to administer, and can reach more farmers.
This article was created through a CTA-led process to document and share actionable knowledge on 'what works' for ACP agriculture. It capitalises on the insights, lessons and experiences of practitioners to inform and guide the implementation of agriculture for development projects.