Leading financial experts from Africa and around the world have called for a redesign of financial structures to better align with the needs of small-scale farmers, considered the backbone of agriculture on the continent. Speaking at a two-day conference held in Nairobi, Kenya, experts emphasized the crucial role of government intervention in creating an enabling environment for financial institutions to expand agricultural lending. The event marked a significant step toward mobilizing the billions of dollars needed to strengthen Africa’s agricultural sector.
Dr. Akinwumi Adesina, President of the African Development Bank Group, opened the conference by highlighting the disconnect between agriculture’s contribution to Africa’s GDP and access to financing. Despite accounting for 30% of the continent’s GDP, agriculture receives only 6% of commercial loans. Adesina stressed that small-scale farmers face unique challenges, including limited access to markets, financing, infrastructure, and inputs, requiring a collective and strategic approach to overcome these obstacles.
During the event, a panel discussion moderated by Yvonne Ndege brought together key figures, including Alice Albright, former CEO of the Millennium Challenge Corporation (MCC); Brian Milder, founder and CEO of Aceli Africa; and Jules Ngankam, CEO of the African Guarantee Fund. The panelists agreed on the need to design sustainable financial mechanisms to bridge the agricultural finance gap, identifying critical barriers such as perceived risks in agricultural lending, high transaction costs, and a lack of formal guarantees.
Brian Milder shared the success story of the Tanzania Commercial Bank, which increased its share of agricultural loans through targeted interventions. He also pointed out the stark contrast between the 14% yield on Kenyan government bonds and the mere 3% return on agricultural loans, underscoring the urgency of making agricultural investments more attractive. “Capital is like water—it flows downhill,” Milder remarked, stressing the need for mechanisms that address both risk and transaction costs.
Alice Albright called for clear public policies to boost agricultural finance and efficiently manage risks, while Jules Ngankam emphasized the importance of tailoring financial products to agricultural value chains and promoting risk mitigation strategies to unlock funding for small farmers. The conference concluded with a strong commitment from financial leaders to prioritize innovative and collaborative solutions to transform Africa’s agricultural landscape.
