Context

Value Chain Finance (VCF) products target entrepreneurial farmers involved in profitable, secured and market oriented value chains. It implies a linkage (formal or informal) between different stakeholders of the chain : producers, agro processing / export firms and / or technical services providers.

CIDR’s first experience in Value Chain Finance has been developed in Tanzania, since 2004.
The first products financed under this kind of schemes have been onions and paprika, in Iringa region.

Contribution

This case study presents a concrete experience in value chain financing in Tanzania (Experience of PRIDE Tanzania). It analyses the profitability for smallfarmers involved, all the steps of product development and implementation and finally the outcome.

It highlights key factors of success that a financial intermediary (FI) should identify before deciding to be involved. It raises a difficult question about a conflict situation between the smallfarmers, clients of the financial intermediary, and a agribusiness firm, the garantor. What should be the right behaviour of a financial intermediary ?

Content

The document :

 Presents the concept of agricultural value chain financing
 Describes the different methodologies and products designed in Iringa for different types of value chains (with or without formal linkages between actors)
 Describes the results achieved in term of outreach, categories of actors of the chains and activities financed, efficiency and financial performance
 Analyses the discrepancies between results expected and achieved.