Mali Value Chain Finance Study

This paper is part of a body of work being conducted under the AMAP FS Knowledge Generation Task Orders with Abt, Chemonics, and DAI focused on value chain finance. The overall goal of the value chain finance work is to understand how best to facilitate finance to and within value chains in order to both:

  1. increase the competitiveness of those value chains and
  2. increase the incomes of poor households active within those value chains.

The focus of this paper is work conducted in Mali in March through May of 2007. The basic process followed for the study discussed below was to:

  • identify value chains with the perceived potential to grow and benefit a number of low income households;
  • identify upgrading needed for that growth; and
  • identify financing needed for that upgrading.

Value chain finance is defined as that finance which enables one or more types of upgrading to occur, whether that finance is provided: (1) through and among the value chain actors; (2) from financial institutions to value chain actors; or (3) some combination.

This paper very succinctly summarizes the issues of end markets, upgrading, and finance. The term upgrading refers to improvements in one or more of four different areas, such as: process upgrading, product upgrading, functional upgrading and chain (or channel) upgrading.The type of upgrading needed will determine what, if any, financing is appropriate.

Although, the study was done in Mali the finding can be applied in other countries.

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