Value Chain Finance

Smallholders need access to finance to operate and invest in their business. Using the links between smallholders, their suppliers and buyers increases their financial attractiveness for financial institutions, leading to commercially interesting financial services matching the needs of smallholders in the value chain.

Participants
You are a value chain development practitioner working for donors and NGOs, aiming to link your value chain actors to an emerging financial sector. You are working for a bank or micro-finance institution, striving to enrich your portfolio with innovative products that can serve rural and agricultural clients. You are working as a policy maker for private and/or financial sector development, trying to create a conducive business environment.

Course objectives
By the end of the course you will be able to recognise the financial flows within value chains and to analyse the financing needs along the value chain. You will learn how to recognise the household, farm and crop financing needs of smallholders. You will understand how to increase the creditworthiness of smallholders and improve the provision of financial services based on smallholder positions in the value chain. You will learn about innovative financial products, and you will understand when and how they can be applied. The course will provide you with instruments to motivate stakeholders to take action.

Course outline

Day 1	• Value chain development concepts and principles • Determine needs and challenges for value chain finance • Understand financial sector practices for the agricultural sector
Day 2	• Minimise risk for borrowers and lenders • Understand innovative financial services, their pros and cons for smallholders and financial institutions
Day 3	• Warehousing, factoring, leasing and other products: when and how? • Contract farming; opportunities for leveraged financing of smallholders
Day 4	• Grants, guarantees, loans and equity financing • Emerging value chains and financial sectors; role and instruments of donors • Stimulate value chain finance development in your contex