Expert Consultation with Financial Service Providers: Understanding the sustainability issues agricultural producers need to consider to be investment ready and access finance
Access to finance is vital for agricultural producers. It enables them to purchase inputs or pay for working capital and make long-term investments that are needed to add value to their farming operations while strengthening their climate resilience.
However, agricultural producers often have difficulty obtaining that finance, despite their role as significant drivers of agricultural production and employment in developing countries. Female producers face particular challenges in this area, such as their vulnerability to climate change impacts and a lack of training or land tenure, along with the related implications for "bankability" in accessing finance.
To better understand the issue, we sought to examine what risks and sustainability issues financial service providers (FSPs) consider relevant when assessing finance requests from agricultural producers. The paper was born out of a previous SSI webinar in November 2018, where we presented the findings of a consultation we held in mid-2019 with FSPs.
We asked FSPs to consider the sustainability issues that affect their assessments of when to provide loans, grants, and other financial support to agricultural producers. In addition, we asked these FSPs whether they use voluntary sustainability standards in their investment decision-making. This paper summarizes the results of those findings and will be an important input in the upcoming State of Sustainability Initiatives (SSI): Standards and Finance Review.