MIX and Council on Smallholder Agricultural Finance Deepen Partnership

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December 4, 2017

 

Earlier this year, we wrote about our existing engagement with the Council on Smallholder Agricultural Finance (CSAF), the alliance of social lenders that targets agricultural businesses in the ‘missing middle’ in low- and middle-income countries. In 2017, MIX deepened our partnership with CSAF members and we look forward to supporting the alliance's strategy development in 2018 and its efforts to encourage other financial institutions to increase lending to high-impact agricultural SMEs.  

 

CSAF is a pre-competitive body focused on developing industry standards and best practices for lending to agricultural SMEs. Combined lending by CSAF members has increased at a compound annual rate of 25% from $354 million in 2013 to $682 million at the end of 2016. However, lenders face a number of market risks and challenges. In order to better understand these risks – and to encourage other institutions to increase lending – CSAF members share aggregate-level data through the annual State of the Sector report, produced with analytical support from MIX. 

 

Our team at MIX collects and analyzes thousands of data points. The subsequent aggregate analysis highlights challenges and opportunities, while also allowing lenders to assess and inform their strategy. In the third annual State of the Sector report, readers can view recent growth trends as well as risks. The report also provides insights and recommendations for industry actors to address the financing needs of the world's 450 million smallholder farmers. 

 

Last week, MIX presented to CSAF members the findings from a mid-year analysis, part of an effort to provide more frequent views into their evolving portfolio. The overall trends identified in the analysis were also shared with leading agricultural finance actors participating in a meeting to discuss "Expanding the Market for Agricultural SME Finance".  Our continued efforts to collect and analyze funding flow data will help CSAF members build informed strategies to reach more agricultural SMEs and manage risk. As members of the alliance continue to expand their portfolios, frequent and detailed analysis will support their efforts to lead by example and encourage other investors, as well as financial institutions, to examine the opportunities in agricultural finance. We look forward to continuing to deepen our work with CSAF, its members and other ecosystem actors dedicated to strengthening the market.