The African Rural and Agricultural Credit Association (AFRACA) and the Food and Agriculture Organization of the United Nations (FAO) have co-authored a paper on Agricultural Value Chain Finance Innovations and Lessons: Case Studies in Africa which is a series of different case studies and examples of Agricultural Value Chain Finance in sub-Sahara Africa.
The case studies are descriptive and highlight real-life scenarios with an aim to facilitate training on value chain finance as well as to inform readers interested in innovative applications of diverse models and tools as well as related issues and challenges.
The agricultural value chain business model and strategy are fundamentally important to financial sustainability and profitability in agriculture value chain finance. The business model case studies were selected owing to their levels of innovation and lessons learned; all of these examples of business model involved partnerships and linkages and many of the interventions required some support to help build capacity or provide financial or risk-sharing incentives to facilitate the inception of the innovation or reach new target groups.
Most of the case studies highlighted have contractual agreements between two or more parties although some of these are informal working agreements. Cashless financial transactions between some of the value chain parties are used to varying degrees in the cases documented.
The use of in-kind loans, triangular arrangements of buyers, producers and sellers, mobile money for transfers, point of sale payments and cashless transactions are also common. Mobile-based communication is used to facilitate finance, input purchasing and marketing.
Click this link to access the full paper on Agricultural Value Chain Finance Innovations and Lessons: Case Studies in Africa.