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Oct 2016

Value chain financing in agriculture: the case of Zambia

Smallholder farmers in Zambia comprise 85% of the farming community. Such farmers are not regarded as creditworthy and their agricultural activity is characterised by low yields in production. The aim of this study is to investigate whether VCF could offer increased access to agricultural finance for Zambian smallholder farmers. Such financing will act as an enabler to mechanisation of the farming operation and in turn improve productivity.

This study investigated and documented three independent case studies representing practical examples of VCF applied within the Zambian smallholder agricultural sector.

Each case study highlights the benefits of a value chain approach for providing finance but also emphasise certain challenges and risks associated with the approach. It was found that the VCF approach will improve the access to agricultural finance for Zambian smallholder farmers. It is recommended that investors, financiers and policymakers consider both the benefits and challenges with offering finance solutions following a VCF approach. 

Africa is the continent that has to feed the world. The continent has more than a quarter of the world's total arable land available and an abundance of natural resources.

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