Innovative Financing for Agriculture and Food Value Chains

This TA addresses the knowledge gaps on AFVC (agriculture and food value chain financing), with the end-view of expanding the outreach of AFVC financing to smallholder farms and SMAEs, especially in the ADF countries. Impact and Outcome The expected impact by 2016 will be the improved access to AFVC financing for smallholder farms and SMAEs in participating low-income DMCs. To achieve this impact, the TA’s outcome will be the development of innovative AFVC financing framework. The TA will have three outputs: (i) submission of a policy report for inclusive and sustainable AFVC financing to the Governments of Bangladesh and Cambodia, (ii) development of innovative AFVC finance business models for smallholder farms and SMAEs in participating low income DMCs for deliberation by AFVC financial providers, and (iii) application of a knowledge platform on innovative AFVC financing by selected DMCs. For output 1, a comprehensive literature review will be conducted on the financing modalities and products for AFVCs, and the major policy and institutional bottlenecks to ensuring inclusive and sustainable AFVC financing and growth in Asia. A stacked survey and evidence-based case studies for different AFVC typologies and AFVC financing types will also be conducted. Based on demand and supply analysis for AFVC financing, policies and institutional barriers will be studied in terms of inclusiveness, sustainability, and potentials for integrated AFVCs using four country cases: the People’s Republic of China and India, because of their expansive wealth of AFVC experiences; these will provide relevant insights to low-income DMCs, Bangladesh (ADF-blend DMC) and Cambodia (ADF-only DMC). A strategic evidence-informed policy report for inclusive and sustainable AFVC financing will be producedand disseminated in Bangladesh and Cambodia. A communications strategy will be done for advocating reforms in key regional forums For output 3, a review and assessment will be done of available knowledge platforms on AFVCs in Asia and the clients these serve. Information gaps and priority issues will be identified to explore possibilities for collaboration on knowledge platforms. A knowledge platform for innovative AFVC financing of smallholder farms and SMAEs will be set up in Bangladesh and Cambodia. The firm will also produce a book that provides the findings of the survey, case studies, and the strategic policy and institutional reform agenda. The outputs will be (i) articulation of the key policy, institutional, and regulatory constraints and priority recommendations in AFVC financing for smallholder farms and small and medium-sized agro-enterprises (SMAEs); and (ii) a report on AFVC-related funds and recommendations. He or she will: contribute to the policy analysis on AFVC financing; (ii) provide recommendations and lessons learned that will facilitate the access to AFVC financing of smallholder farms and SMAEs; and (iii) conduct market mapping of AFVC-related funds, AFVC funds, and AFVC financing models of development partners and those being provided by private commercial banks, and assess which of these ADB could do differently