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May 2015: AgriFin Forum Outcome

 

We are delighted to report back from last week's AgriFin Financing Agricultural Forum held in Istanbul, Turkey. Throughout the event, leading banks from across the globe shared their expertise, know-how, processes and tools related to Agricultural Value Chain Finance (VCF). Attendees from over 50 countries active in agricultural finance shared lessons and built relationships with their peers. We are happy to share with you key themes arising from the Forum.

  • VCF offers significant opportunities for banks to expand their lending to the agricultural sectors by using aggregators to reduce transaction costs, while reducing risk by overcoming asymmetrical informational hurdles.

  • There are many ways for banks to support agricultural enterprises and large and small farmers, including direct lending relationships. Value chain finance is just one mechanism that allows banks to reach smallholders and provide critical services to them.
     

  • Introducing VCF is not just about getting the technical aspects of such lending right, it requires buy-in from across the institution, not least the banks senior management who need to support it and provide the space for it to take shape and grow. 
        

  • It takes time to get it right - there is no one model, but a variety of means of making this work, and all institutions will need to approach this with the knowledge that they may not get it right first time, but will have to adapt and evolve as they grow their knowledge and learning. 
         

  • Often the demand for VCF doesn't come from the borrowers (the farmers) but from large aggregators and off-takers, who are existing clients of the banks. VCF adds the opportunity to provide value-add to existing clients, assisting them in strengthening their value chain by supporting their suppliers and partners.
        

  • VCF is not just about lending, but it also offers great opportunities for banks to cross-sell other products and services to their clients. 

We would like to thank all of those that attended, presented and engaged dynamically in the Forum. In the coming days and weeks we shall be sharing more outputs and outcomes from the event for the benefit of those who were unable to join us in Istanbul. In the meantime please feel free to review the presentations from the Forum.

All presentations are available online and ready for download!