01 Jan 2015
ISF Advisors

Impact and risk metrics play an important role in efforts by investors, technical assistance providers, certification bodies, and corporations to close the over $400 billion gap between demand for and supply of finance to smallholder farmers. 

Metrics can help demonstrate industry impact, improve operating efficiency, and foster collaboration on industry infrastructure to grow the market. A well-implemented metrics strategy can also help to mitigate reputational risks arising from unintended effects on farmers and their families, communities, or ecosystems.

But the current landscape of smallholder finance impact and risk metrics is crowded with multiple units of analysis, target users, and objectives; it is confusing to industry leaders and daunting to potential new entrants. The Initiative for Smallholder Finance hopes to clarify the space and enable greater collaboration through the tools housed on this page, which are explained in our briefing document, “Smallholder Impact and Risk Metrics: A Labyrinth of Opportunity.”

The first tool, a universal theory of change for smallholder finance, seeks to build a shared...

20 Nov 2014
ISF Advisors

The eighth briefing note in a series from the Initiative for Smallholder Finance discusses how agricultural technical assistance in the developing world maps to addressing various specific financing constraints for smallholder farmers.

Financial services and advisory support programs can help banks and financial institutions (on the supply side) overcome constraints of product design and distribution for smallholder farmers. Technical assistance can prepare farmers (on the demand side) for financing through value chain development programs or government extension programs.

Public sector institutional strengthening programs can address constraints in the enabling environment by increasing effectiveness of government institutions or supporting credit bureaus or land title reform.

Combined with financial tools from donors— such as credit guarantees, insurance, or concessionary lending to local credit providers—agricultural technical assistance plays an important role in mitigating risk and boosting confidence for financial institutions involved in smallholder financing.

However, 97% of technical assistance funding currently goes to programs that address demand side constraints, while relatively little funding supports financial institutions to develop and deploy viable products that will increase the overall supply of smallholder financing.


 

20 Nov 2014
ISF Advisors
Multiple farmers working in single field

The seventh briefing note in a series from the Initiative for Smallholder Finance categorizes and characterizes the different kinds of agricultural technical assistance in operation in developing countries around the world.

Technical assistance programs can be highly effective in helping smallholder farmers improve their agronomic skills, business and financial skills, and access to markets – but currently only $8 billion is spent on such programs each year, or an average of $18.66 per farmer.

A skewed allocation of funding across farmer segments leaves some farmers better served than others.

The research will guide funders and other stakeholders on how to demarcate different technical assistance markets and understand the respective challenges and opportunities of each. These markets include the public sector extension market, the donor and corporate-funded value chain development market, the financial services advisory market, and the public administration strengthening market.