F4A V0.45 Presentation

farming means business
Bridging the Gap
in Agricultural Finance

farming means business 2
1.8
3.8
5.8
7.8
9.8
1900 1925 1950 1975 2000 2025 2050
Population(billions)
World Population Forecast
0.2
0.3
0.4
0.5
0.6
1950 1960 1970 1980 1990 2000 2010 2020
HectaresofArableLandperperson
Year
Diminishing Arable Land
Page 2
Global Challenges

Dutch
Government
Private
SectorPPP
Objective:
To increase lending from financial institutions
to Agribusiness SMEs and POs
Innovative products / risk mitigation
Agri-finance know how and expertise
Active pipeline building
Agribusiness Graduation programs
Coordination, transparency, sharing
Page 4
Finance 4 Agriculture

farming means businessPage 4
Data supplied by the Kenya Bankers Association
Agriculture
Agriculture
Agricultural Finance Gap
Very low

Why Banks do not like Agriculture
To entice banks to lend more
we have to address their
specific risk issues and cost
concerns.

Bridging the
GAP
The 12 F4A projects are strongly interrelated and designed to leverage off each other
and work towards a common goal: BRIDGING THE GAP in agricultural finance.
Page 9
F4A = 12 interlinked projects

Bridging the GapSupply side Demand side
Strategy:
“A coordinated approach around a common language”
Mission:
“To increase lending from financial institutions to
agribusiness SMEs and POs”
Barriers
Capacity Building
individual FI’s
Agri-Finance Training
Agri Credit Scoring tools
Guarantees & Insurance
solutions
New Finance
Company
Supply Chain
finance
Assessments
AgriPortal
Basic Agribusiness
Graduation
Advanced Agribusiness
Graduation
ATIC
Multi-
stakeholder
Page 9
…. Integrated Approach

…. Tangible solutions for real problems

Includes
 Hands-on l/t technical assistance at selected partner Banks,
MFIs and/or SACCOs;
 Up to 50% grant money available on a matching fund basis.
2. Agri-Finance training & community building
3. Credit scoring
4. Guarantees & insurance
6. Supply Chain Finance
7. Assessments of Agribusinesses
Objective
To professionalize the capacity of financial institutions (FIs) in
providing financial services to the agricultural sector, in a
responsible & sustainable manner.
Main correlation with other
F4A Projects 
Page 12
1. Capacity Building (Financial Institutions)
Execution Partner: Financial Access

F4A Projects 
Page 13
2. Agri-Finance Training + Community Building
Objective
To enhance and exchange knowledge and experience through-
out the Agri-Finance banking community.
Includes
 Workshops, trainings, seminars and presentations on new
developments in Agri-Finance;
 Social media community building, bringing together
Financiers, Investors, F&A stakeholders, NGOs, and key
government representatives.
1. Capacity building (financial institutions)
6. Supply Chain Finance
10. Advanced Agribusiness Graduation
11. Multi-stakeholder Alignment

F4A Projects 
Includes
 Improving/streamlining workflow and processes of credit
underwriting;
 Improving credit scoring on the basis of analysis of the
existing loans and past loan portfolio of the FIs;
 Bringing down the overall cost of credit delivery.
Objective
To introduce a credit scoring tool to allow FIs to lend to
smallholders with lower internal credit assessment and
processing costs per loan.
5. NBFI (New Finance Company)
Page 14
3. Credit Scoring + Workflow

F4A Projects 
Includes
 Bridging knowledge gaps at the F4A participating FIs
regarding agricultural risk mitigation instruments like
guarantees, insurance and hedging instruments;
 Increase the general awareness and knowledge of these
instruments via a dedicated resource center;
Objective
To establish a broker function between providers of guarantees
and insurance and the F4A participating financial institutions
active in agricultural finance.
Page 15
4. Guarantees & Insurance

F4A Projects 
Page 13
Includes
 Greenfield non-deposit taking financing vehicle targeting
the Missing Middle in agriculture;
 Client target includes emerging farmers and POs in need
of mechanization and scaling-up;
 Project entails all scoping and set-up costs associated
with starting a new NBFI.
3. Credit scoring
4. Guarantees and Insurance
8. Agri-Portal
Objective
A USD 25 million financing vehicle, ready to start operations in
2015, with the objective to have executed 250 agricultural
loans in 36 months after inception.
5. New Finance Company (Missing Middle)

F4A Projects 
Includes
 Setting up an automated environment to enable FIs to
conduct very high volume invoice discounting transactions
(a.k.a. reverse factoring);
 Liquidity is injected into Agri- and SME sectors with
corresponding credit risk shifting to corporate Chain
Captains as ultimate off-takers.
2. Agri-Finance training
3. Guarantees & insurance
Objective
Introducing ‘early payment solutions’ to commercial banks and
financial institutions, which will be benefitting Kenyan
suppliers (SMEs) and piloting a Supply Chain transaction
platform that provides execution and marketing services.
6. Supply Chain Finance - Platform

F4A Projects 
Includes
 Conducting 500 assessments on POs on their level of
professionalism and creditworthiness
 The assessment profiles are uploaded onto the AgriPortal
to broker businesses deals.
2. Agri-Finance training and community building
8. Agri-Portal
Objective
Bridging the information gap between financial institutions and
the agricultural sector through agricultural credit ratings,
based on SCOPEinsight’s Scoring of Organizational Performance
(SCOPE) methodology.
7. Assessment of Agribusinesses
Execution Partner: SCOPEinsight

F4A Projects 
Includes
 Brokerage function between agribusinesses, financial
institutions and BDS provider and input suppliers through
SCOPE rating profiles
 A library function with Kenya specific information about
agricultural value chains and other relevant best practice
agri-finance information.
4. Guarantees and Insurance
Objective
The development of a digital platform that functions as an
online market place and one-stop shop for agricultural finance.
Page 19
8. On-line Portal

F4A Projects 
Includes
 The development of a BDS curriculum that is based on the
9 SCOPE score chapters and that can be offered to POs on
the basis of their capacity building needs.
Objective
To establish aligned capacity building programs that are based
on the SCOPEinsight rating methodology, that can deliver a
pipeline of professional and bankable POs in a shorter period of
time, against lower costs and with a natural TA exit.
9. Basic Agri-business Graduation

F4A Projects 
Includes
 Creation of an infrastructure and establishment of a
standardized process to facilitate advanced graduation.
 A mapping of BDS providers (experts and consultants) able
to execute such business transformation services in the
agricultural sector.
9. Basic Agribusiness Graduation
Objective
To ensure that almost bankable POs (with a score ≥ 4 in the
SCOPE assessment) and that have a financing need, are
supported (against a fee) with their last steps towards
bankability by BDS experts or consultants.

F4A Projects 
Includes
 Following the F4A project, several concrete challenges
and topics will be identified that require multi-
stakeholder agreement to move further, which will be
discussed during Steering- and Working Groups.
8. Agri-Portal
12. ATIC
Objective
To derive at a set of agreed and practical solutions for
identified barriers in the agricultural finance sector in Kenya
by key stakeholders in the F4A project (financial institutions,
NGOs, donors, POs and governmental organizations).
11. Multi-stakeholder Platform

F4A Projects 
Page 20
Includes
 ATIC is a proposed one-stop rural farm centre concept
hosting agro-dealers, equipment traders, financial
services, hardware stores, extension services etc.
 Training services, demonstration plots, warehousing
facilities and collateral management services.
5. NBFI (New Finance company)
8. Agri-Portal
Objective
Development of a concept proposal and resource mobilization
for proposed chain of one-stop agri-malls (ATIC) which provides
a physical infrastructure for stakeholders in agriculture to
conduct business and will function as a physical marketplace.
12. ATIC : Agricultural Trade & Innovation Centre

Contact
Please contact us for more information:
Financial Access
Maarten Susan
Programme Manager
maarten.susan@financialxs.com
Page 24

F4A V0.45 Presentation

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