Agri-SME finance and COVID-19: Issues to consider in the short and long term
When and where
As the COVID-19 pandemic continues to unfold and governments adopt different containment strategies and responses, experts are discussing current and future impacts in many areas. In this context, attention to the impact of the crisis on agricultural value chains and food systems has been growing, and so has recognition of the challenges facing particularly micro, small and medium-sized enterprises (MSMEs) in the sector. Yet, a structured reflection around the impact of COVID-19 on demand and supply of agri-SME finance remains needed.
This reflection is of momentous importance, given that MSMEs are the backbone of agricultural supply chains in most developing countries. Many of these enterprises struggle even in “normal” times to access the range of financial services they need. Today, many are reporting new challenges due to restrictions on labour movement, logistical bottlenecks, and falls in market demand, all of which impact on their financial needs as well as on their capacity to repay loans. While these are all highly location and value chain specific, similar needs and concerns are being reported in different countries and regions. Many governments and financial institutions are taking measures to help keep afloat SMEs, mostly with a focus on immediate response, but measures to ensure longer-term resilience are likely to be soon needed, given projected impact on economies, jobs and incomes.
This panel webinar will kick-start a conversation among some key actors in the agri-SME finance ecosystem about what impacts we are seeing and what we will likely see in the future, what the data is telling us and where key information gaps are, and what remains relevant and what needs rethinking in terms of policies, institutional arrangements, financial products, and delivery mechanisms. The objective is two-fold. First, it is to illuminate areas where information gaps are critical and to think about how to fill them. Second, it is to point to areas where existing tools and approaches can be deployed and those where new solutions need to be developed.
Issues for discussion will include:
- Current impact of the crisis on the demand and supply sides of agri-SME finance. How is demand evolving? How are finance providers and intermediaries responding? Are new products and services emerging?
- Likely future impacts. How will volume and quality or composition of demand for agricultural and agri-SME finance change with economic slowdown in the coming months? Are there opportunities to develop new business models to sustain an effective response in the agri-finance ecosystem?
- What is the role of policy? What policy responses are being put in place, how are they working, and what are the key enabling factors? How does country and local context affect viable policy responses?
- What are the approaches and tools in agricultural finance that are proving relevant? For instance, how effective are proving to be emergency credit lines and new working capital loans, on the finance supply side, and social transfers on the demand side? Where are the main gaps, particularly as market conditions and business models in value chains evolve?
- What are the approaches and tools that are likely to work best to support future recovery for MSMEs? For instance, how feasible and effective are likely to be measures to sustain demand for agricultural products, or new financial and regulatory packages to strengthen the liquidity of financial service providers in the longer term?
Greta Bull, CEO of CGAP and Director at the World Bank Group
Ms. Bull has 18 years of experience in development finance, primarily focused on small and medium enterprise finance, microfinance, and digital financial services. She has worked with both financial services providers and policy makers in Latin America, Central and Eastern Europe, Sub-Saharan Africa, and South Asia. Her clients have included banks, microfinance institutions, mobile network operators, and FinTechs. Before joining CGAP, Ms. Bull was a manager for Financial Institutions Advisory Services at the International Finance Corporation.
Maximo Torero, Assistant Director General, United Nations Food and Agriculture Organization (FAO)
Maximo Torero-Cullen has been the Chief Economist/Assistant Director-General, Economic and Social Development Department (ES) of the Food and Agriculture Organization (FAO) since January 2019. Prior to joining FAO, he was the World Bank Group Executive Director for Argentina, Bolivia, Chile Paraguay, Peru and Uruguay and before that he led the Division of the Markets, Trade, and Institutions at the International Food Policy Research Institute (IFPRI).
Hannelore Beerlandt, Chief Executive Officer, AGRICORD
Hannelore is an agricultural economist and the CEO of AgriCord, an international alliance of 13 agri-agencies, mandated by farmers’ organisations and their cooperative businesses (from Asia, Brazil, Canada, Europe and Senegal) to support their peers in low income countries. Hannelore is also president of Enabel, the Belgian Development Agency, board member of impact investment funds for rural development (Kampani) and member of the Advisory Board of the Institute for Development Policy of the University of Antwerp.
Thomas Essel, Secretary General, African Rural and Agricultural Credit Association (AFRACA)
Thomas has many years of experience in economics and development. Prior to joining AFRACA, he worked in Bank of Ghana for over twenty-two years, holding different positions. His latest positions included Head of External Financial Relations and Head of the Bank of Ghana-initiated “Ghana Incentive-Based Risk-Sharing System for Agricultural Lending” (GIRSAL).
Jason Scarpone, President and CEO of the African Fertilizer and Agribusiness Partnership
Jason is an international development specialist with more than 20 years of experience in the design, implementation, and management of economic recovery and agricultural development programs. He specializes in public-private partnerships and programs that boost smallholder farmer access to input and output markets. Prior to his current position, Scarpone served as vice president of Africa Programs for Cultivating New Frontiers in Agriculture (CNFA).