3.3 Access to finance and other key challenges of agri-SMEs

Twenty-seven SMEs said they have taken any type of insurance, in most cases obligatory such as third-party car insurance. A variety of agricultural insurance products are available, e. g. some of our respondents had taken out livestock insurance. Awareness about insurance products is limited. For instance, a dairy farmer from the outskirts of Addis shared how he lost his first 10 cows to disease. Only afterwards did he learn, from a peer, about the option of livestock insurance which he has since used.

Further details are provided in in annexes 2 and 3.

3.3 Access to finance and other key challenges of agri-SMEs

SMEs discussed various challenges hindering the growth of their enterprises, which we cluster as follows: • (Lack of) Access to finance: This refers particularly to credit, both the requirements, particularly collateral, by the banks and the application process for a loan facility. • Export: Includes processes at banks or government agencies, requirements by buyers, as well as access to forex.

• Security: All aspects of political and religious stability, particularly the civil war in the Northern region(s). • Regulation: Required documentation, licenses etc. to produce, process or trade, except export, which is covered in the category “Export” above. • Political barriers: Subsumes government-related factors other than sector specific regulations, i.e., corruption, infrastructure especially electricity supply and access to land. • Climate change/ agri-sector characteristics: These challenges are combined because most of the mentions are related to weather and climate-change risks; seasonality is also included.

• Market linkages: Clusters issues of accessing inputs and finding demand for outputs (excluding export), both in terms of quantities and prices (i. e. there is probably an overlap with those naming inflation as a challenge), as well as logistical concerns. • Technology: Encompasses availability of machinery and its maintenance, management systems (particularly HR) and quality management – the latter with a vague link to market linkages.

Note: Proportions are based on number of mentions of the respective challenges. More than one mention per SME allowed.