Improving access to finance through product innovation and the value chain finance approach

Agricultural lending is seen as risky and costly. Banks shy away from the high transaction costs and risks related to agriculture such as crop failure, diseases, market price fluctuations and frequent fragmentation of smallholder farmers and agribusinesses.

An assessment of the rice, maize, Irish potato, tea, coffee, dairy, poultry and horticulture value chains in Rwanda showed that their key needs were around access to working capital, capital for acquisition of assets and trade finance.

In order to develop new lending approaches for the agriculture sector, IMSAR partnered with Equity Bank Rwanda (EBR), a lead commercial bank in Rwanda.

This brief describes EBR's approach, the results achieved and the lessons learnt.