CHRONIC LACK OF FINANCE IN AGRICULTURE SECTOR
Agriculture employs the majority of the population in East Africa and accounts for a substantial share of the economy, but it receives a miniscule portion of financing.
In East Africa
of people work in agriculture
of the national GDP
Yet agriculture receives less than
of commercial bank lending
THE PATTERN IS CONSISTENT ACROSS EAST AFRICA
SIZING THE AGRICULTURAL FINANCE GAP
THE MISSING MIDDLE FOR AGRI-SME FINANCE
While there is some lending activity in the missing middle, the unattractive economics of serving this segment (i.e., too risky and costly to serve) indicate why there still are no successful business models for serving it at scale.
Large loans to a handful of corporate entities clustered in formal value chains, since informal value chains are considered riskier
Agricultural SMEs that aggregate thousands of farmers and create employment opportunities but are considered too risky and costly to serve, especially when they work within informal value chains
Small loans to many individuals and microenterprises, with more loans going to formal value chains than to informal value chains