INCREASING ACCESS TO FINANCE FOR ZAMBIAN FARMERS

Our study for IFAD focussed on three agricultural value chains to develop financial products of which smallholders will benefit in the near future.

Agriculture constitutes a relevant factor in Zambian economy activities, but several factors hamper its development in the rural regions. Among others, the lack of access to and usage of suitable financial services for all actors along the value chain is one of the main obstacles limiting the growth of the sector.

In the framework of the project financed by the International Fund for Agricultural Development (IFAD) and managed by Development Bank of Zambia (DBZ), AFC has been appointed for carrying out a study on three agriculture value chains to be prioritised and to develop related financial products. In the end, the ultimate goal is to increase financial access and use of financial services by the rural population, especially smallholder farmers.

In the past months, our team has worked on developing Value Chain Finance products, advising the DBZ team on how to channel funds to selected financial service providers, identifying which financial service best meets the needs of involved actors. Based on different criteria, such as export potential, job creation and accessibility to market among others, and in concertation with DBZ, our team has selected the poultry, dairy and soya beans value chains. For them potential agriculture financial products would have been developed.

As a matter of fact, developing products for agriculture requires to consider other aspects with regard to products targeting commerce or business activities, such as crop varieties and their related specificities, in terms of inputs and seasonality, or different financial needs at the start of the season. Additional needs to adapt financial products adequately are knowledge on agriculture and value chain finance. For this reason, our team has trained a part of the DBZ staff in a hybrid format, in person and online, making use of the training course on agriculture finance for bankers developed by AFC.