Smallholder farmers play a key role in the production of agricultural crops for domestic and global markets. But, smallholders remain disenfranchised, often facing economic, financial and institutional constraints that make the adoption of more efficient practices, technologies and business models difficult. Those constraints also limit productivity, thus reducing the profits available to be captured in the value chain. More affordable and accessible finance for smallholders and small-and-medium enterprises (SMEs) has the potential to support the upgrading of production systems and the delivering of more effective resource management, helping smallholders to embrace higher sustainability standards.
Financial Service Providers (FSP), when they apply Environmental and Social Governance (ESG) conditions to the services they provide, have the potential to leverage and support sustainability commitments related to land use, commodity production practices, social inclusion policies and trade. Increasingly, FSPs are acknowledging the business case for responsible investments, with ESG performance often correlating positively with financial returns. In addition, the existence of more responsible FSPs does not necessarily lead to increased finance for smallholders.
This session will explore the multiple perspectives of development practitioners and financiers, including impact investors, by drawing on specific cases, experience and innovative approaches. The panel will discuss concerted efforts to make finance more accessible and affordable to smallholders and SMEs in ways that support more sustainable production and increase capture value.
Key questions addressed:
- What business models and schemes can be more effective for transferring finance and other assistance required to upgrade smallholder and SME production models?
- How can greater finance be accessed from FSPs to support smallholders and SMEs to overcome barriers to more sustainable and deforestation-free practices?
- What elements need to be in place to enable scalability along supply chains and across landscapes, and what would be the role of FSPs in making this possible, including impact investment?