synopsis This is short summary of a solution that identifies opportunities to finance operations along the Agribusiness value chain in Nigeria.It is presented to the Nigerian government,African Development Bank and the Nigerian financial private sector.It provides actionable recommendations for improving productivity, income and growth in the key value chains through financing which in turn will lead to massive productive employments and job creation while diversifying to the non-oil export economy of the nation.

2. Background
Agriculture in Nigeria contributes about 33%
of GDP and over 70% of employment.

3. Value chain finance as a concept
refers to financial products and
services that flow to or through any
point in a value chain in
order to increase returns on
investment, growth and
competitiveness of that chain.

4. Value chains are mechanisms
that allow producers, processors,
buyers, and sellers - separated by
time and space - to add value to
products and services as they pass from
one segment of the chain to the next,
until the product gets to the final
consumer

6. How can we accelerate the creation of
productive jobs in agribusiness value chain
through private sector growth via a wide range
of innovative financial products and services
such as insurance, overdrafts, factoring and
leasing, as well as investment loans,
guarantees, etc?.

7. • Value chain development has almost become
a magic formula for sustainable agricultural
investments.
• The fastest way to catalyze the economic
growth of Nigeria while diversifying from the
non-oil export economy.
• Banks and other financing institutions
need to understand investment opportunities
at various segments of value chains, to better
develop and provide different financial
products that suit the various actors and
segments of the chain.

8. • There are many development programme that
support value chain development. In parts
they also deal with the issue of finance.
However, the type of finance they provide is
not sufficient to cover the needs of the entire
value chain.
• The existing financial products are
tailored to needs for equipment and
short-term working capital.
• Financial needs are particularly acute for
farmers, who can rarely access a sufficient
amount of finance to operate their businesses
profitably.

9. • Providing large-scale loans to a few eventually
promising agro-processing units will not
render quick-wins if the rest of the value
chain is not receiving necessary support as
well.
. Value chain segments in rural areas are
not well-served by formal financial
institutions, particularly commercial banks
• There is a need to build vertical linkages in the
financial sector and to leverage the existing
chain linkages to provide sufficiently
comprehensive financial services to value chains

10. 1. Lending to actors in agricultural
value chains requires a thorough
assessment and understanding of the value
chain and careful identification of needs and
opportunities on the different levels of the
chain.

11. Firstly, as with any borrower, finance providers
to any value chain actor need to
assess risks of lending to the sector
(production/yield, price/market, and
diversification).
Secondly, finance providers need to assess the
individual creditworthiness of the borrower,
which entails a process of screening, and contract
enforcement.
Thirdly, the issue of collateral is crucial for the
design of appropriate financial products.

12. 2. In the design of any value chain finance support
scheme one needs to be aware of the existing
forms of formal and informal finance provision in
specific value chains.
Demand for non-financial services exists at all
points along the chain (improved technologies,
business planning, market development,
management technical
assistance).

13. 3.Commercial banks and lending institutions
should work towards new ways of securing
loans to businesses beyond traditional
collaterals by making use of the flow of
product.
4.By encouraging the commercial banks to
engage in agricultural lending by providing
concessional loans through the African
Development Bank that acts as the MDB for this
region.

14. THANK YOU
FOR
YOUR TIME