What work does USAID do in agricultural finance? That is the question we hope start answering during this month on Agrilinks. We have multiple goals, including:

• For those new to the sector, we will give a high-level overview
• For those who are already familiar with the sector, we hope to go one level deeper. That means not just repeating things you can find elsewhere online or putting out marketing pieces but to get a little into the weeds. My experience is that it’s almost impossible to understand how an activity works by just looking at its website so we’ll try to break things down for you. 
• We hope to ask questions that we don't necessarily know the answer to now, but that we think are important to highlight and discuss.
• We want to share challenges activities face to acknowledge the work we do is hard, innovation is risky, and there is a need to be flexible.
• Finally, we hope this will become a reference source to come back to when you have questions in the future and want to know where to go to learn more.

We'll do this over a series of blog posts that can be grouped broadly around the following topics:

• The agricultural finance market
  • Landscape of agricultural finance. We'll discuss how smallholder farmers and small and medium-sized enterprises (SMEs) in agriculture are segmented.
  • International investment funds. We'll look at how these funds have been segmented to better understand what type of capital they provide, their investment strategy, and who they target. 
• USAID as an agency
  • USAID structure. We are so large and complicated, I feel like it’s always helpful to go over our structure.
• Our work with the Development Finance Corporation
  • Mission Transaction Unit. The Mission Transition Unit is the former Development Credit Authority at USAID and now the USAID transaction window at the Development Finance Corporation. We'll look at what’s the same, what’s changed.
  • Food Security Unit. An agriculture-focused transaction team at the Development Finance Corporation, set up with support from the Bureau for Resilience and Food Security. We'll discuss why a specialized sector team was needed.
• Locally led USAID activities
  • Technical assistance. Much of the work USAID does in the field is around providing technical assistance to agriculture subject matter experts. We'll go over some of these different approaches, using examples in the field.
  • Kenya Investment Mechanism. We'll do a deeper dive on the Kenya Investment Mechanism as an example of an activity developed at the mission level and how it strengthens other USAID activities.
• DC-led USAID activities
  • Aceli Africa. We will talk about why Aceli Africa was able to use loan-level data to develop its incentives, its first year of operations, and when it makes sense to expand.
  • Nutritious Food Financing Facility. We will share why USAID decided to support the design and launch of this new fund. 
  • Resilience and Food Security buy-in to the INVEST mechanism. We will be featuring the work, approach and impact of two awardees under the Resilience and Food Security INVEST portfolio.
  • Alliance for a Green Revolution in Africa. We will publish blog posts on the Alliance for a Green Revolution in Africa's work as well as highlights of the African Green Revolution Forum Deal Room 2021.
• Private sector engagement
  • Neumann Kaffee Group. This is an example of how we can engage a multinational corporation to help it work more closely with its smallholder suppliers, i.e. the multinational corporation's role as an implementer. 
  • IDH Farmfit Fund. The Farmfit Fund used Neumann Kaffee Group as a blueprint and is an example of how we build off our past work, the role of multinational corporations as an investor, and how a guarantee can be used as “second loss.” We will also discuss how Farmfit’s structure and investment strategy is similar to and different from that of Clarmondial.
  • Case studies. We will highlight several recently completed case studies that review past examples of USAID private sector engagement in agriculture.
• Cross-cutting
  • Climate change. We'll discuss how the future launch of the Green Recovery Investment Platform will work to help achieve USAID’s goal to mobilize $150 billion in climate finance.
  • Digital. We will post an introduction to the “Strengthening Mobile Money Agent Networks Replication Guide” and discuss how it is relevant for agriculture. 
  • Youth. We will discuss meeting the challenge of lending to youth agribusinesses in Africa.

There will also be a webinar on how donors approach impact-linked finance in the agriculture sector with representatives from the Dutch Ministry of Foreign Affairs, KfW (Germany), and the Swiss Agency for Development and Cooperation.  With emerging models and approaches that have been running for a few years, we want to have an open discussion about where subsidy is needed and how to target it to optimize impact. 

In addition to the above topics, we encourage anyone who has something they would like to share to register on Agrilinks, which will give you the opportunity to publish related blog post during this month yourself.

You can take a look here for previous agricultural finance resources shared on Agrilinks.

I will leave you with one last thought from my colleague Lawrence Camp from Agrilinks sister site Marketlinks:

“We (USAID’s private capital practitioners) don’t have the answers. We have some thoughts, but the goal of this series is to solicit the answers [and discussion!] from the community of practice – you, the readers.”

Note that you must register and be logged in to Agrilinks to post comments. We look forward to hearing from you!