On September 9, the G20 Global Partnership for Financial Inclusion (GPFI) brought together policymakers, financial service providers and researchers to discuss key trends and gaps in agricultural finance.
The demands on the global food system are rising rapidly. By 2050 there will be an additional two billion or more people to be fed. The agricultural sector is essential for food security, job creation and overall economic growth around the world. The proposed global Sustainable Development Goals call for increasing agricultural productivity, raising small holder income and ending hunger.
“There is large untapped potential to modernize the agricultural sector and boost productivity. The G20 recognizes that expanding access to finance in the agricultural sector is crucial to achieve these goals,” said Susanne Dorasil (GPFI Co-Chair; German Federal Ministry for Economic Cooperation and Development (BMZ)).
The Agricultural Finance Roundtable featured discussions around key emerging issues. What are new successful approaches to value chain finance? What are the opportunities for financial institutions to target women in the agriculture sector? Is index insurance viable for small holder farmers in emerging countries? Do we really understand the needs of smallholder farmers? How to exploit the potential of technological advances? International experts from academia and development organizations presented new research findings and policy recommendations in these areas. Five discussion papers formed the basis for the various sessions which led to the following main outcomes:
- The importance of value chains – a key ingredient for growth and scale
- Digital technology as a potential game changer
- Subsidies can be helpful, at many levels – but be SMART with them!
- Don’t forget building human capital, and using expertise throughout VC
- Critical role of women in agriculture and in VCs
- Invest in better data
- Good overall legal framework is essential
A central theme of the event was the role of innovative digital technologies in transforming agrifinance. “Digital technologies have helped to lower credit risk, reduce costs and make the delivery of financial services more efficient. This has expanded the range of financial services available to smallholder families in emerging markets,” said Michael Tarazi, senior financial sector specialist at the Consultative Group to Assist the Poor (CGAP).
The G20 Agricultural Finance Roundtable was organized in partnership with the International Finance Corporation (IFC), BMZ, GIZ and SME Finance Forum. The outcomes of the roundtable will form a G20 synthesis report on new trends and innovations in agricultural finance.
