Also, climate change and unsustainable agricultural practices have led to land degradation and massive deforestation. Access to finance, especially for smallholder farmers in developing economies, is an important condition for change.
Large investments are needed by farmers to replant, irrigate and to transition to more sustainable practices, but banks generally perceive the risks and costs as too high. To reduce the large demand-supply gap in smallholder finance, financial services providers need to be attracted to the sector in a way that allows them to generate decent economic returns yet contribute to more sustainable agricultural practices and improved environmental protection.
With the recent COVID-19 crisis, access to timely financing for inputs will be critical to mitigate the negative impacts on food systems and to safeguard food security. Financial institutions are now faced with unprecedented challenges in serving their clients due to COVID-19, including pressure on profitability and deterioration of portfolio quality. As these challenges continue to impact the ability for financial institutions to effectively reach out to smallholder farmers, digitization of banking operations will be a key determinant to overcome this crisis and to support food systems and food security.
FACS is part of the Financial Access group, the ex-ING Bank emerging markets financial sector advisory business taken private by management in 2007. As a financial advisory & solutions provider with long-standing operational experience in banking and finance, we are intimately aware of the key hurdles and challenges financial institutions face to provide financing to small agri enterprises and smallholder farmers. We break down these hurdles one-by-one through supply chain mapping, data-driven farmer selection, cashflow-based credit assessment, and the development of loan portfolios tailored to the requirements of agri lenders.
We operate from our Head Office in Amsterdam and have operations in Kenya, Uganda, Cote d’Ivoire, Ghana, and Indonesia. Combined with our ING track record, we have successfully completed more than 300 assignments in more than 40 countries since 1991.
to accelerate financial inclusion for smallholder farmers across landscapes and agricultural supply chains at scale.
and operational banking experience to design less risky, scalable and sustainable loan profolios.
for banks, microfinance institutions and (impact) investors, at a much lower cost.
We offer tailored advice and deliver technology solutions to accelerate financial inclusion for small agri enterprises and smallholder farmers in conservation landscapes and larger agricultural supply chains. We apply our in-depth expertise in financial capacity building, data analytics, risk assessment, financial technology and our extensive hands-on banking experience to support financial institutions to build profitable, sustainable and scalable rural agri investment portfolios. We provide the following services to our clients:
We allow financial institutions to serve smallholder farmers customers better, faster and at lower cost and risk. We develop and deliver customized smallholder finance solutions through our structured Data2Deal methodology, which includes:
• Supply chain analysis and market mapping
• Data collection 100% digital and/or combined with field visits
• Credit risk profiling and development of individual cashflow-based risk scores
• Financial product development
• Development of smallholder loan portfolios meeting the lender’s risk impact and other requirements.
We mobilize capital to create impact and originate, structure and support the execution of impact investments in small agri enterprises and smallholder farmers for banks, MFIs, impact investors and other financial services providers. Through our partnerships with development NGOs, conservation organizations, business incubators, private companies, farmer associations and other supply chain actors we have access to a variety of data and information, which will allow us to design investment portfolios tailored to the specific requirements and preferences of impact-focused investors.
We support financial institutions with the development and delivery of digital solutions to reduce cost and risk. Through our digital shared services platforms LendXS and Kreditek Financial Access (KFA) we provide IT solutions to support financial institutions and (impact) investors to achieve scale in their agrifinance operations. Our data collection, workflow management, credit scoring and loan monitoring tools allow agri lenders to more accurately assess credit risks and to originate and process farmer loans faster and at lower cost. Our technology solutions also meet the growing needs from financial institutions to assess and monitor the impact of climate change on their investment portfolios.
Corrie MacColl has developed an outgrower program for rubber smallholders to establish an integrated farm of rubber, cash crops and livestock lending scheme. The program aims to boost the economic livelihood of its smallholder partners by providing a combination of farming loans and critical education on farm management. Lending will be routed to the outgrower programme through MITFUND, managed by Afriland First Bank. FACS will support the partner financial institution to onboard smallholders to the outgrower lending scheme by conducting a credit risk assessment of the 200 targeted smallholder farmers. FACS will also conduct farmer data collection for credit profiling and review the cashfl
The World Poultry Foundation (“WPF”), with support from the Bill & Melinda Gates Foundation (‘BMGF”), FMO, Rabobank Foundation and IDH Farmfit Fund, has developed a program in selected countries in Africa to improve income generation for small agri entrepeneurs and to enhance food security and public health nutrition through the delivery and financing of brooders of chickens (“brooder units” or “BUs”). The program aims to recruit, train and finance 6,000 small rural entrepreneurs, who will develop and operate the BUs. FACS will provide financial advisory and technical support services to enable the provision of working capital finance to the BUs in Tanzania under supervision of WPF. To do
The Council on Smallholder Agriculture Finance (“CSAF”) is the leading global network of lending practitioners promoting an inclusive finance market for agriculture SMEs. The forum was founded in 2012 and now includes 16 members and affiliates committed to market growth and impact. One of the objectives of CSAF is to develop and launch basic principles that members can follow during loan restructuring and workouts. In this context, Financial Access engaged with CSAF to design and deliver a training program to the global and regional staff of CSAF to increase members’ understanding of the key principles of loan restructuring and workout programs.
In January 2020, the AGRI3 Fund was launched with the objective to catalyse private financial resources for forest protection and sustainable agriculture. The AGRI3 fund aims to unlock at least USD 1 billion in finance towards deforestation-free, sustainable agriculture and land use. In this regard, the AGRI3 Fund is working with its partners Rabobank and IDH on the identification of key priority investment opportunities and on developing a pipeline of potential sustainable investment transactions in the oil palm sector in Indonesia.
In West-Kalimantan, the existing mosaic landscape is at risk of being turned into oil palm monocrop plantations. The local Dayak community has interest to maintain the existing landscape and sound business cases can help to do so. Therefore, Tropenbos International (“TBI”) and Tropenbos Indonesia (“TI”) are conducting a feasibility study to assess the economic viability of several agroforestry systems in the area. The objective of the study is to develop an alternative to agricultural monocultures of agri-commodities that can contribute to improving the livelihoods of local communities while preserving forest and biodiversity. Financial Access will work closely with partner DIBcoop to prep
Although oil palm is native to West Africa, Africa as a continent is a net importer of palm oil, with production accounting for just 3.5% of global production. The growing international demand for edible oil, cosmetics, biofuel, lubricants, surfactants, energy, and other applications has boosted the growth of palm oil activities in Africa. In this context, in collaboration with APOI and in alliance with Proforest, TFA is commissioning research and analysis of the investment situation in the oil palm sector in APOI countries with the objective of building an investment case for oil palm development that creates jobs, protects the environment and improves rural development and livelihoods.
Rubber production is a key income stream for several million smallholders in South East Asia. However, Indonesian smallholders are trapped in a vicious cycle of low yield and low international rubber prices. In order to improve the socioeconomic and environmental performance of the natural rubber value chain, the Global Platform for Sustainable Natural Rubber (“GPSNR”), is seeking to investigate how value can be equitably distributed across the entire natural rubber chains. The study is funded by the German Federal Ministry for Economic Cooperation and Development (BMZ).
The productivity and quality of the rubber produced in Indonesia remains low mainly due to a lack of knowledge on cultivation techniques. Our partner SNV has designed a program to promote responsible sourcing in South Sumatra. As part of the scaling up strategy of sustainable natural rubber practices, SNV is building an integrated system through training centers as well as improving market access through a collaboration with Kirana Metagara Group, a rubber offtaker. In order to set up a viable financing mechanism for rubber smallholder farmers, Financial Access will help to assess the level of readiness of stakeholders as well as conceptualize the building blocks required for replicability
The performance of micro, small and medium enterprises (MSMEs) in markets and socio-political arenas – and their ability to have a voice — is essential for achieving sustainable landscapes that are resilient to external shocks, such as changes in markets, policy or climate. To strengthen both the performance and voice of MSMEs they need to have access to resources, including finance.
One of the main barriers to access finance for MSMEs is lack of financial literacy. Financial Access was engaged by Tropenbos International (TBI) to conduct a study of current experiences and to develop a strategy to strengthen the financial literacy of MSMEs in the landscapes and value chains.
The largest cocoa-growing area of Ghana is plagued by falling yields and persistent pests. The Sustainable Cocoa Farmer Finance (SUCOFIN) project was developed by Financial Access, in partnership with SNV Ghana, to build the capacity of partnering local microfinance institutions and to support them in offering finance for cocoa renovation and rehabilitation to pre-qualified smallholder farmers.
A graduation approach is developed where smallholder farmers will be credit scored to receive input loans. Once these loans have been repaid after one planting season, farmers will become eligible for larger and longer-term loans over time.