New Trends in Agricultural Finance

Agricultural finance is crucial to support the growth of the agricultural sector. Indeed, it is essential for food security, job creation, and overall economic growth. This synthesis report presents a summary of research studies on five key areas of agricultural finance innovation prepared under the G20 Global Partnership for Financial Inclusion (GPFI), as well as the presentations and discussions of these study findings during the “G20 Roundtable on Innovations in Agricultural Finance” convened on September 9, 2015 in Antalya, Turkey by the Small and Medium Enterprise (SME) Finance Sub-Group.

After a brief background for setting the scene, the five key research areas presented in the synthesis2 are: a) Understanding Demand of Smallholder Households, b) Digital Financial Services, c) Financing for Women in the Agricultural Sector, d) Value Chain Finance, and e) Agricultural Insurance. The five areas of emphasis each examine the innovations and trends, with the first three looking at the needs and opportunities for small farmers and women and ways in improve their inclusion into the financial system. The fourth area presents an approach and innovative tools for effective agricultural lending and market inclusion, and the fifth area focuses on innovations in using agricultural insurance as a tool to address one of the most important risks that inhibit agricultural finance, especially for smallholder households. Given the diversity of topics, the format of the research papers and summaries vary with the theme. The synthesis ends with key messages about the trends and lessons, including recommendations for policy interventions and further research and development.

This report was produced jointly by GIZ, the World Bank Group, and the German Federal Ministry for Economic Cooperation and Development (BMZ) on behalf of the SME Finance Sub-Group of the G20 Global Partnership for Financial Inclusion (GPFI).

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