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|Month, Year © 2016 Council on Smallholder Agricultural Finance

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Page 1: |Month, Year - CSAF...Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources • Current growth of formal

|Month, Year© 2016 Council on Smallholder Agricultural Finance

Page 2: |Month, Year - CSAF...Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources • Current growth of formal

LEGAL DISCLAIMERThis presentation discusses general industry and sector trends; lending activity; and broad economic, market, and policy conditions as perceived by the authors. It is not research or investment advice. This document has been prepared solely for informational purposes. Although the authors of this presentation made a reasonable attempt to obtain information from sources that they believe to be reliable, they do not guarantee its accuracy or completeness, and the authors undertake no responsibility to update this report for information that may have changed after it was obtained by the authors. The historical performance presented in this presentation is based on unaudited data reported independently by each financial institution and is not representative of future performance.

Page 3: |Month, Year - CSAF...Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources • Current growth of formal

Agenda

Data and insights on the evolving credit market for agricultural SMEs

• Overview Brian MilderExecutive Vice President, Root Capital (Representing CSAF)

• 2015 Performance & Growth Trends Blaine StephensChief Operating Officer, MIX (Data Partner)

• Market Outlook and Recommendations - Carina TorresAgriculture Technical Advisor, Oikocredit (Representing CSAF)

• Dan ZookDirector of Investments, Initiative for Smallholder Finance (Knowledge Partner)

• Q&A

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Page 4: |Month, Year - CSAF...Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources • Current growth of formal

CSAF Members & Affiliates

Data & Knowledge Partners

Page 5: |Month, Year - CSAF...Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources • Current growth of formal

• To facilitate market entry and increase lending in the

• To focus the agriculture finance sector on reaching and supporting

million small-scale farmers

• To promote responsible lending principles

CSAF envisions a thriving, sustainableand transparent financial market that generates long-term economic, social and environmental benefits by meeting the financing needs of agricultural businesses that aggregate smallholder farmers in developing countries worldwide.

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Mission Vision

Page 6: |Month, Year - CSAF...Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources • Current growth of formal

• Market Growth to meet a greater share of the vast financing need of the

• Responsible Lending Principles promoting market growth that contributes to positive impact on agricultural businesses, the smallholder farmers they aggregate, and long-term sustainability of the sector.

• Social & Environmental Impact for farm households, their communities, and the ecosystems on which we all depend.

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Our Focus

Page 7: |Month, Year - CSAF...Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources • Current growth of formal

2015 At A Glance

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$597MDISBURSED

to

672BUSINESSES

sourcingfrom

2.1MFARMERS

(34% WOMEN)

across

66COUNTRIES

earning$$3.7B

COMBINED REVENUE

Page 8: |Month, Year - CSAF...Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources • Current growth of formal

$345

$566 $597

2013 2014 2015

Figure 1: Annual Disbursements

MM

M

Annual Disbursements

64%growth

5%growth

1. Commodity price volatility

2.Crop failure due to diseases and extreme weather events

3. Currency volatility

4.Limited managerial capacity among borrowers

5. Weak capitalization among borrowers

Top Risk Factors

Growth Slows, Risk Increases

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Page 9: |Month, Year - CSAF...Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources • Current growth of formal

Industry Trends

Blaine Stephens, MIX

Page 10: |Month, Year - CSAF...Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources • Current growth of formal

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Increasing Impact

$597MDISBURSED

to

672BUSINESSES

sourcingfrom

2.1MFARMERS

(34% WOMEN)

across

66COUNTRIES

earning$$3.7B

COMBINED REVENUE

Page 11: |Month, Year - CSAF...Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources • Current growth of formal

$597MDISBURSED

to

672BUSINESSES

sourcingfrom

2.1MFARMERS

(34% WOMEN)

across

66COUNTRIES

earning$$3.7B

COMBINED REVENUE

66%PRODUCER

ORGANIZATIONS

33%PRIVATE

AGRI-SMEs

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0% 20% 40% 60% 80% 100%

26%

< $250K

22%

$250K to

$500K

45%

$500K to $2M

7%

>$2M

Loan Amounts

Borrower TypeGrowth in Total Borrowers

Understanding CSAF Borrowers

Page 12: |Month, Year - CSAF...Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources • Current growth of formal

$597MDISBURSED

to

672BUSINESSES

sourcingfrom

2.1MFARMERS

(34% WOMEN)

across

66COUNTRIES

earning$$3.7B

COMBINED REVENUE

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39%24%

20%

11%

6%

Figure 2: Disbursements By Region

South America

Central America*

Sub-Saharan Africa

South & East Asia

Other

2014 2015 Change

South America $209M (37%) $229M (39%) +9%

Central America $167M (29%) $143M (24%) -17%

Sub-Saharan Africa $109M (19%) $120M (20%) +9%

South & East Asia $36M (6%) $67M (11%) +46%

Other $46M (8%) $38M (6%) -20%

Total $567M (100%) $597M (100%) +5%

Disbursements By Region

Working Across 66 Countries

Page 13: |Month, Year - CSAF...Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources • Current growth of formal

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Global Coffee Lending Declines by 12%

$185

$310 $272

2013 2014 2015

M

MM54%

55% 46%

Coffee Lending By CountryGlobal Coffee Disbursements and Concentration

Page 14: |Month, Year - CSAF...Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources • Current growth of formal

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Cocoa Lending Rises 14%

Cocoa Lending By CountryGlobal Cocoa Disbursements and Borrowers

27

46

56

$27

$59

$67

2013 2014 2015

Borrowers Disbursements

M

M

M

Page 15: |Month, Year - CSAF...Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources • Current growth of formal

A Perspective From Peru& CSAF Market Outlook

Carina Torres, Oikocredit

Page 16: |Month, Year - CSAF...Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources • Current growth of formal

A Perspective From Peru

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Page 17: |Month, Year - CSAF...Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources • Current growth of formal

Market Outlook & Recommendations

6% to 10% Estimated market growth in 2016 according to a survey of CSAF members

to grow this market?

Supply

Demand

Enabling Environment

• Risk-tolerant capital• Loan guarantees• Currency reserves

• Financial management training• Governance support• Agronomic assistance• Market linkages

• Contract enforcement• Quality data and market information• Consistent legal and regulatory frameworks

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What do we mean?

Page 18: |Month, Year - CSAF...Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources • Current growth of formal

The Industry Context

Dan Zook, Initiative for Smallholder Finance

Page 19: |Month, Year - CSAF...Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources • Current growth of formal

What is ISF?

ISF is a multi-donor and investor platform for the development of financial services serving the smallholder farmer market

• The goal of the Initiative for Smallholder Finance (ISF) is marked progress toward closing the gap between the +$200 billion in smallholder financing demand and the current $50-60 billion supply

• ISF engagement is most useful in developing high-potential yet nascent financial structures that lack

• deep research into critical issues affecting smallholder finance

www.initiativeforsmallholderfinance.org

An initiative of the Global Development Incubator

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Page 20: |Month, Year - CSAF...Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources • Current growth of formal

Inflection Point: The Era of Farmer Finance

• The financing needs of smallholder farmers in Latin America, sub-Saharan Africa, and South and Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources

• Current growth of formal finance providers—projected at approximately 7% per year—will not go far enough to cut into this gap within the next five years

• The industry can accelerate growth through concerted action around:

o Smart subsidy that unlocks new and better-matched sources of capital

o Progressive partnerships that increase risk-adjusted business model returns

o Customer centric product design that drives demand and usage

Key Messages

For more information:

www.initiativeforsmallholderfinance.org

www.raflearning.org

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Page 21: |Month, Year - CSAF...Southeast Asia exceed $200 billion, of which less than $60 billion is available, much of which is provided through informal sources • Current growth of formal

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