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The Value Chain Framework and Rural Finance

Topic :

This set of 16 slides provides a useful discussion of value chains in the context of rural finance and based around the following three key messages:

  1. The Value Chain Framework is useful for expanding financial services and for developing enterprises.
  2. Value Chain Finance is not new. It helps to fuel many enterprises. Can you believe it’s happened without us?
  3. Financial institutions can learn from and engage more with value chain actors in order to develop new products and reach new markets.

The presentation notes that we often think about financing value chains via financial institutions and depicts the different sections along the chain where this may be possible. However, it suggests that when assessing markets with Value Chain Analysis, the demand side focuses on the most relevant financial services demanded because they help targeted enterprises to take advantage of opportunities for growth, whilst the supply side identifies a range of service providers, building on their records, perspectives and relationships.

In particular, the presentation looks at three examples of value chain finance in some detail – trader credit, contract farming/outgrower schemes and warehouse receipts. In each case, it covers the benefits, what information is learned and lessons for the financial sector. Furthermore, consideration is given to the limits and power relationships of each form of value chain finance. The closing section of the presentation includes a look at both value chain actors and financial institutions from the perspective of their relevance and their complimentary roles.

  • Resource type
  • Author Fries, B (ACDI/VOCA)
  • Year of Publication2005
  • Region
  • LanguageEnglish

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