Market information services, financial services and investments have generally focused on cash crops and have paid little attention to staple crops like roots and tubers. In the case of cassava, knowledge within the financial sector about the commercial potential of the crop is limited and most commercial banks have never dealt with cassava at all. However, with the growing roots and tubers processing industry and burgeoning market opportunities, the need for inclusive financial services is growing.

A value chain finance approach to increase access to finance and investment opportunities for actors in the root and tubers sector is being adopted. The project increases access to inclusive financial instruments through capacity building and information exchange between financial service providers and producer groups and SMEs on business models and needs for financial services. In addition, strategies for increasing investment in R&T are being developed while defining principles for agricultural investment in the sector.

Approach

• Identifying information gaps for financial service providers on the roots and tubers sector. Analysing the chain with a focus on the financial flows, both internal and external to the chain.
• Convening producer groups and local financial service providers to exchange information on their business models.
• Bringing about better understanding of investment constraints and risk management approaches.
• Training financial service providers on agricultural value chain finance approaches to develop inclusive and tailored financial instruments suitable to stakeholders in the roots and tubers chain, including products such as village savings and loan initiatives for smallholder groups and small enterprises.
• Training producer groups and SMEs on addressing constraints that limit access to finance.

Examples from project countries

In Rwanda, government statistical services (NISR) will be supported to develop a strategy that improves the availability of information on production and trade volumes of roots and tubers in order to develop financial and insurance products and services.

In Uganda, training will be organized for financial service providers on value chain finance approaches to develop inclusive financial instruments suitable for potato value chain actors. Training will be provided to SMEs and farmer organizations on their potential role in planning and implementation of responsible contract farming and related financial arrangements.

In Cameroon, value chain actors will be trained in the planning and implementation of contract farming and related financial arrangements for producing, processing and marketing cassava.

In Malawi, the project will support the linking of SMEs and farmer organizations to financial service providers to obtain grants or loans for investment in cassava production and processing.