A 2-week mission to Samoa of a Finance Expert from Fiji is taking place within a wider IFAD experts mission and is part of an assignment to facilitate and strengthen financial inclusion of smallholder farmers and agribusinesses in support of value chain development in the Pacific Islands.
The objective of the consultancy assignment is to validate and initiate the priority action points identified in the regional and national “Promoting Nutritious Food Systems Finance and Business Environment” action plans with a focus on Samoa. Various ministries, financial institutions, agribusinesses and farmers will be visited and consulted.
This will result in the design of project interventions and possible partnerships to ensure that smallholders and other key players, particularly domestic agribusiness, in the target value chains have access to a diversified range of financial services meeting the needs of men and women.
The consultant will identify and define the means to optimize financial inclusion for smallholders and agribusinesses in target value chains, to develop different enterprise business models to secure their access to financial services and markets and to design an approach for leveraging remittances for investing in the target value chains.
The lessons learned from this activity will be shared and discussed among a wider stakeholder group in the Innov4AgPacific project target countries in order to scale-up the proposed models and approaches country-context specific.
Access to affordable financing is a major constraint to for agricultural value chain development and subsequent increased production and availability of locally grown and consumed nutritious food. Much of the funding tends to be informal and short-term.
Financial institutions face challenges in offering products and services given the; high transaction costs of reaching remote and rural populations and/or communities; sector-specific risks and high perception of possible non-repayment; and limited knowledge of the demands of the smallholder farmers and small and medium enterprises (SMEs) to offer more tailor-made services.
Previous consultations and discussions at national and regional events organised within the framework of the CTA/IFAD/PIPSO Innov4AgPacific Project confirm the situation presented above and further strengthen the need for targeted and coordinated initiatives at both political (government policies) and institutional (private and public financial institutions) as well as producer (especially smallholders) and agribusiness (processors, trader, etc.) levels.
If you are interested to know more about the current situation on access to finance in the Pacific you can download the ‘Documenting Legislation and Access to Finance and Agri-Value Chain Risk Management’ report below.