Providing almost $600m to Farmers
Members of the Council on Smallholder Agricultural Finance
(CSAF) today announced in their Year in Review report that they
provided $597 million in loans to 672 small and medium-sized
enterprises (SMEs) during 2015.
This financing helped to fuel an estimated $3.7 billion in
combined annual revenue among these businesses, which connect more
than 2.1 million smallholder farmers-over one-third of whom are
women-to domestic and international markets.
CSAF is an alliance of nine leading impact-focused lenders that
serve the financing needs of agricultural businesses trapped in the
"missing middle"-too large for microfinance but considered too
small and too risky by most commercial banks.
These businesses typically require loans ranging from $100,000
to $3 million. By targeting high-impact businesses that source
agricultural products from smallholder farmers and create jobs in
rural communities, CSAF members seek to improve farmer livelihoods,
transform agricultural economies, and promote farming practices
that sustain the environment.
From coffee cooperatives in Peru exporting to global markets to
grain processors in Kenya selling nutrient-fortified flours to
local consumers, CSAF members continue to support the growth and
development of a diverse finance market for agricultural SMEs in 66
CSAF lending in 2015 represented a 5% increase compared to the
$566 million in credit disbursed to 651 businesses during 2014, but
a significant slowdown relative to the 64% growth in 2014 from a
base of $354 million in 2013, the first year in which CSAF data was
This deceleration occurred as fewer new businesses requested
loans and many existing borrowers had difficulty repaying their
loans. Lenders noted that a range of production, price, and market
challenges are constraining the sector. Specifically, 2015 was
marked by a decline in the prices of several agricultural
commodities as well as a steep depreciation of emerging-market
currencies. Lenders also cited crop losses due to disease and
extreme weather events among the top factors adversely affecting
the growth and quality of their portfolios.
These external shocks and stresses inhibit the growth and
profitability of agricultural businesses, and can quickly push
already vulnerable farming communities deeper into poverty. Because
the global coffee sector accounted for approximately one-half of
total lending, it had a significant influence on overall CSAF
In 2015-despite strong growth in major coffee-producing
countries like Colombia, Indonesia, and Uganda-lending to the
coffee sector overall contracted by 12%. Leading factors included
low prices and residual effects of the 2013/2014 outbreak of coffee
leaf rust disease in Latin America. However, this decline in coffee
lending was offset by 27% growth in other crops, as lenders
continue to expand into new value chains.
Lenders reported a 14% increase in lending to businesses in the
cocoa sector, and grains, nuts, quinoa, and rice were among the
fastest-growing commodities. These and other growth and risk trends
by crop and geography are explored in more detail in the new CSAF
Formally launched in 2014, CSAF provides a forum for
agricultural lenders to convene on a pre-competitive basis and
exchange learning, identify best practices, and develop industry
standards around responsible lending practices.
Alongside Shared Interest as a founding member,other members and
affiliates include: Alterfin, Global Partnerships, Incofin
Investment Management, Oikocredit, Rabobank, responsAbility
Investments AG, Root Capital,and Triodos Investment Management. To
learn more about the opportunities and challenges associated with
smallholder agricultural finance, download the full 2015 Year in
Review report and listen to a related webinar discussion here.