{"id":989,"date":"2020-03-27T11:13:41","date_gmt":"2020-03-27T16:13:41","guid":{"rendered":"https:\/\/iisd.org\/ssi\/?p=989"},"modified":"2023-03-25T16:11:26","modified_gmt":"2023-03-25T21:11:26","slug":"new-ssi-report-investors-requirements-for-granting-finance-to-smallholder-farmers","status":"publish","type":"post","link":"https:\/\/www.iisd.org\/ssi\/news\/new-ssi-report-investors-requirements-for-granting-finance-to-smallholder-farmers\/","title":{"rendered":"New SSI report sheds light on investors\u2019 requirements for granting finance to smallholder farmers in developing countries"},"content":{"rendered":"

Ottawa, March 27, 2020<\/em> \u2013 What are the sustainability issues financial service providers (FSPs) consider important when assessing investment requests from smallholder farmers in developing countries? The International Institute for Sustainable Development (IISD) consulted 51 investors during the summer\/spring of 2019 to better understand their criteria for granting finance to smallholder farmers. The results are available in the recently launched State of Sustainability Initiatives\u2019 (SSI) report \u201cExpert Consultation with Financial Service Providers: Understanding the sustainability issues agricultural producers need to consider to be investment-ready and access finance<\/a>.\u201d<\/p>\n

Agricultural producers are an engine of economic growth and job creation in developing countries, where they make a major contribution to food security. Smallholder farmers are responsible for providing around 80% of the food consumed in developing countries; in some (such as sub-Saharan African countries), they also provide close to 70% of total primary employment.<\/p>\n

Despite playing a major role in the economy and food security, agricultural micro, small, and medium-sized enterprises (MSMEs) in developing countries face significant challenges in accessing finance. Their demand is estimated at USD 240 billion per year, while the supply of finance offered by formal and informal FSPs, including value chain actors, reaches only an estimated USD 70 million.<\/p>\n

Female producers face particular obstacles in this area\u2014such as their vulnerability to climate change impacts and lack of training or land tenure\u2014that constrain their potential to qualify as \u201cbankable\u201d and thus access finance.<\/p>\n

According to the report, the investors consulted by IISD consider governance, business management, and climate change as having \u201chigh importance\u201d when assessing financial requests from smallholder farmers in developing countries. For Cristina Larrea, one of the report\u2019s authors and Sustainability Standards Workstream Lead for the IISD\u2019s Economic and Law Policy program, many agricultural producers in developing countries are not \u201cbankable\u201d as they don\u2019t meet FSPs requirements for grant finance.<\/p>\n

\u201cWe know that, in many cases, the agricultural producers don\u2019t know the requirements to access finance. Neither do many of the organizations that provide technical assistance to them. And meeting these requirements is crucial for reducing the risk associated with investments (particularly in developing countries) and closing the finance gap,\u201d explained Larrea.<\/p>\n

In addition, the report also provides recommendations to smallholder farmers on how to enhance their ability to access finance, e.g., by adopting sustainable practices to adapt to climate change and comply with voluntary sustainability standards (VSSs). This could help address investors\u2019 perceptions of risk when they consider finance requests from agricultural producers.<\/p>\n

According to Cristina Larrea, the requirements suggested by the 51 investors to improve farmers\u2019 \u201cbankability\u201d will be explored in-depth in the upcoming \u201cSSI: Standards and Access to Finance\u201d, which will examine the issue from the lens of VSSs. Specifically, the publication will explore how complying with VSSs can reduce financial risk and enable farmers\u2019 access to finance. That report will be published later this year.<\/p>\n

 <\/p>\n

ABOUT THE INTERNATIONAL INSTITUTE FOR SUSTAINABLE DEVELOPMENT<\/h5>\n

The International Institute for Sustainable Development (IISD) is an independent think tank that delivers the knowledge to act. Our mission is to promote human development and environmental sustainability. Our big-picture view allows us to address the root causes of some of the greatest challenges facing our planet today \u2013 ecological destruction, social exclusion, unfair laws and economic and social rules, a changing climate. With offices in Winnipeg, Geneva, Ottawa, Toronto and Beijing, our work impacts lives in nearly 100 countries.<\/p>\n

For more information, please contact: media@iisd.org<\/a> or +1 (204) 958 7700 ext. 706<\/p>\n","protected":false},"excerpt":{"rendered":"

Ottawa, March 27, 2020 \u2013 What are the sustainability issues financial service providers (FSPs) consider important when assessing investment requests from smallholder farmers in developing countries? The International Institute for Sustainable Development (IISD) consulted 51 investors during the summer\/spring of 2019 to better understand their criteria for granting finance to smallholder farmers. The results are […]<\/p>\n","protected":false},"author":12,"featured_media":981,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[15,16,17,18,19],"class_list":["post-989","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-financial-service-providers","tag-smallholder-farmers","tag-developing-countries","tag-finance","tag-voluntary-sustainability-standards"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.iisd.org\/ssi\/wp-json\/wp\/v2\/posts\/989","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.iisd.org\/ssi\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.iisd.org\/ssi\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.iisd.org\/ssi\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/www.iisd.org\/ssi\/wp-json\/wp\/v2\/comments?post=989"}],"version-history":[{"count":0,"href":"https:\/\/www.iisd.org\/ssi\/wp-json\/wp\/v2\/posts\/989\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.iisd.org\/ssi\/wp-json\/wp\/v2\/media\/981"}],"wp:attachment":[{"href":"https:\/\/www.iisd.org\/ssi\/wp-json\/wp\/v2\/media?parent=989"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.iisd.org\/ssi\/wp-json\/wp\/v2\/categories?post=989"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.iisd.org\/ssi\/wp-json\/wp\/v2\/tags?post=989"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}