Reinventing financing through public private partnerships in Africa

Developing credit lending facilities can unleash enormous potential in Africa's food systems. CNBC Africa recently spoke to Adesuwa Ifedi, Senior Vice President of Heifer International, about the best ways to drive private sector capital to small-scale farmers in Africa. Ifedi highlighted the need for leveraging data to connect farmers with much-needed finance. She emphasized that while innovation in agriculture has been on the rise, the challenge lies in transforming the way risk is assessed and financing is provided to smallholder farmers. She believes that the private sector, along with public-private partnerships, can play a crucial role in revolutionizing the food systems in Africa. Ifedi pointed out that off-takers, who were previously seen as middlemen causing profitability issues for farmers, have now become essential in transforming agricultural financing. These off-takers are now utilizing farmer data to facilitate lending directly to farmers, thereby bypassing traditional lending methods. This innovative approach has shown promising results, with minimal defaults among first-time borrowers. Furthermore, Ifedi emphasized the need for patient capital to follow innovation in order to attract commercial financing. She highlighted the importance of policies that support and regulate these new financing models, citing examples of countries like Kenya and Ghana that are already exploring new policies to facilitate agricultural financing. Ultimately, Ifedi stressed the importance of collaboration between public, private, and development institutions to drive innovation and financial inclusion in African agriculture.