MIX and SCOPEinsight launch partnership with AGRA to address key obstacle constraining agricultural businesses
The partnership will create market transparency that is needed to unlock financing for agri-SMEs in emerging markets.
Agricultural small and medium enterprises (agri-SMEs) face complex and persistent challenges in emerging markets, despite the vital role they play in these economies.
Agribusinesses do not meet market requirements to attract funding, often because they are not run like businesses. And financiers – which range from local financial institutions, regional lenders, and global investors – find the agricultural sector extremely risky and expensive to service.
The partnership between MIX and SCOPEinsight will address this by using data to create transparency, help financiers make more informed decisions, and build a bridge between agri-SMEs and the capital they need to grow. This partnership’s first set of activities is supported by the Alliance for a Green Revolution in Africa (AGRA).
Agri-SMEs – which include farmer organizations, input providers, off-takers and distributors, among others – play a crucial role in rural economies. “These businesses create employment and connect smallholders to markets and opportunities to improve their livelihoods,” said Camilla Nestor, CEO of MIX. “Yet agri-SMEs are often unable to access the financing they need to grow.” Estimates place the financing gap for agri-SMEs at USD 100 billion for the segment in sub-Saharan Africa alone.
The financing gap is driven in part by low visibility into a pipeline of viable agribusinesses and a lack of reliable data for decision making and investment.
MIX and SCOPEinsight will leverage the support, guidance, and the network connections of AGRA to develop and test a set of standardized metrics that enable investors and lenders to compare the financial and operational performance of agri-SMEs, leading to informed decision making. In order to build this set of metrics, the two organizations will first develop a common language for agri-SMEs in consultation with industry actors including investors, lenders, and the agribusinesses themselves. The partners will also tap into AGRA’s expertise and experience supporting agribusinesses. Beginning with select markets in sub-Saharan Africa, MIX and SCOPEinsight will aggregate existing information currently siloed by value chains and geographies and will conduct outreach to agri-SMEs and their partners.
“Agricultural SMEs contribute to a dynamic marketplace by offering a diverse set of products and services to improve the yields and incomes for smallholder farmers. In order for these businesses to grow sustainably, extend their reach, and enhance their value for customers, they need access to appropriate financial services. Yet the current financial services landscape is exceedingly difficult to navigate for both the SMEs and the financial service providers. By supporting MIX and SCOPEinsight in this effort, AGRA aims to enable these players to more easily navigate the available financial services and, ultimately, better match the supply and demand of agricultural SME finance.”Hedwig Siewertsen, Head of Inclusive Finance for AGRA
The partnership between MIX and SCOPEinsight brings together two organizations with deep experience solving intractable problems in the agricultural finance space.
SCOPEinsight was established 10 years ago with the aim to develop a system that would measure and score the level of professionalism of agri-SMEs with the aim to link these organizations in a scalable manner to finance. The graduation system has for the largest part been developed and is being rolled out with local partners. In the past years, nearly 4000 assessments have been conducted in 40 different countries. “SCOPEinsight has come a long way in these past years and the time is right to develop the last piece of the puzzle. We have a great partner in MIX, who has the complementary knowledge and network to make this a success.” Marise Blom, COO of SCOPEinsight, said of the partnership. She elaborates, “In the past, SCOPE scores with the underlying data have proven to be instrumental for the more professional agri-SME’s to gain access to finance. SCOPEinsight envisions a linkage between the bankability metrics and the SCOPE scores, building the bridge between the agri-SME
’s and the financiers.”
To propel the partners’ vision forward, the organizations are establishing an advisory board to include leading thinkers and practitioners with deep experience in emerging market agricultural finance.
MIX is the leading global data resource for socially responsible investors and businesses focused on inclusive finance. MIX’s catalytic data initiatives encourage the growth of inclusive markets and support informed thinking on the future of financial services. MIX convenes stakeholders to build common data standards that create transparency and develops strategic insight from complex data to help sectors flourish. Founded in 2002, MIX has served as a trusted data partner for socially responsible investors who move USD 10 billion annually. Learn more at www.themix.org.
We are the leading company offering standardized data for the middle of the agricultural value chain. Our system is applicable to every country, every type of organization, and every crop. Since 2010, we have trained over 700 assessors who conducted nearly 4,000 assessments in 40 countries spanning 19 agricultural sectors and reaching more than 9.2 million farmers. Our clients include global agribusinesses, NGOs, financial institutions as well as multilateral development and food security organizations.
Alliance for a Green Revolution in Africa (AGRA) is a partnership-driven institution that is African-led and farmer centered. Established in 2006, AGRA places smallholder farmers at the center of the continent’s growing economy by transforming their farming beyond the solitary struggle for survival, into thriving businesses. Our partners include African governments, researchers, development partners, the private sector and civil society working primarily with smallholder farmers – men and women who typically cultivate staple crops on two hectares of land or less. Our five-year strategy (2017 – 2021), aims to catalyze and sustain an inclusive agricultural transformation through integrated, country-based investment plans in 11 countries with a high potential for success. The focus is on increasing incomes and improving food security for 30 million farm households with support that strengthens the capacities of governments and private sector through policies, programs, and partnerships that increase productivity and access to markets and finance. AGRA drives the bulk of its investments through the Partnership for Inclusive Agricultural Transformation in Africa (PIATA) with funding from the Bill & Melinda Gates Foundation, the Rockefeller Foundation, The German Federal Ministry of Economic Cooperation and Development (BMZ), the UK Department for International Development (DFID), and the United States Agency for International Development (USAID). For more information, visit www.agra.org, Twitter, Facebook, LinkedIn and YouTube.