The link between agribusiness professionalization and bankability

In a recent project with the Local Expert Sundy Merchants Company Ltd., SCOPE scores for three assessed agribusinesses saw significant improvements. Read on to discover how Sundy Merchants’ work led to such impressive results and what these scores mean for the future of these agribusinesses.

Sundy Merchants: A trusted SCOPEinsight partner

Sundy Merchants Company Ltd is a business development services (BDS) provider based in Dodoma, Tanzania. They offer consulting and BDS services to local individuals and organizations at an affordable cost. They promote social progress and economic growth through the work they do with their clients, which includes creating strategies, building partnerships, and implementing impactful projects.

Sundy Merchants and SCOPEinsight have been working together since 2019, when they became certified implementers of SCOPE assessment tools. In 2021, Sundy Merchants became a member of the Local Expert Network (LEN). The LEN is part of an effort by SCOPEinsight and the Alliance for a Green Revolution in Africa (AGRA) to create a more effective BDS ecosystem. By connecting SCOPEinsight’s global standards and the local expertise of like-minded businesses, the LEN ensures that international capacity builders can efficiently implement their projects while strengthening the local economy.

Working together to improve access to finance

In 2019, SCOPEinsight and AGRA began a project to graduate agribusinesses and link them to finance. The project was conducted in four countries: Tanzania, Ghana, Mali, and Nigeria. The agribusinesses were assessed initially in 2019, then they were given targeted training to increase their professionalism based on the results of their baseline assessment. Sundy Merchants performed the assessments and provided the training to the agribusinesses in Tanzania.

In 2021, the agribusinesses were reassessed to show what improvements they had made, thanks to their training. The data from their reassessments was used to fill out the bankability metrics, which were developed in 2021 by SCOPEinsight, AGRA, and the Center for Financial Inclusion (CFI). These metrics contain the information on agribusinesses that banks require for their pre-due diligence process. By collecting the information in one place and displaying it in a way that is easy to understand, they create easier communication between banks and agribusinesses. The bankability metrics with the reassessment data were shared with multiple banks and then discussed in follow-up meetings.

The impact of training by Sundy Merchants

As part of the overall access to finance project, Sundy Merchants assessed three agribusinesses in 2019, provided targeted technical assistance and training, and then reassessed the agribusinesses in 2021. On reassessment, these agribusinesses saw significant improvements. The average SCOPE score increased by almost 45%. This meant that the average total score was higher than the average total score nationwide in Tanzania. All three agribusinesses were classified as maturing or professional in their total score and all eight dimensions after the reassessment.

Sundy Merchants achieved these impressive results due to the training, coaching, and mentorships they offered to the agribusinesses. They tailored the capacity building program for each agribusiness based on the results of their baseline assessment, so each agribusiness focused on the aspects of professionalism that required the most assistance. The results of this tailoring are striking. For example, one of the dimensions that scored lowest in the baseline increased by an average of 58% on reassessment. By focusing on the lowest scoring dimensions, Sundy Merchants was able to provide the most impactful training, which led to the greatest results.

Using data to create a pipeline for financial institutions

As part of the project, Sundy Merchants also had meetings with two financial institutions in Tanzania, during which they shared the bankability metrics with the data from the reassessments. The initial feedback from these meetings was very positive. The financial institutions all thought a pipeline of investable agribusinesses provided through the bankability metrics format would be very helpful. They also indicated that the data provided in the bankability metrics would be sufficient for their pre-due diligence process.

A future for agricultural finance

According to a recent ISF Advisors report, the annual financing gap for agribusinesses in sub-Saharan Africa is approximately $74 billion. To close this gap, it is important to make efforts on both the agribusiness and financing sides. Agribusinesses must work to become more bankable, and financiers must work to better understand the needs and risks in agriculture.

The work done by Sundy Merchants in this project will help solve this problem from both ends. By helping the assessed agribusinesses to become more professional, Sundy Merchants has also helped them to become more bankable. And by sharing the bankability metrics with financial institutions, Sundy Merchants has shown them a way to receive a trustworthy pipeline of investable agribusinesses. If both efforts continue to scale in the future, then the financing gap in agriculture can eventually close.

Are you interested in professionalizing agribusinesses and helping them to become more bankable? Contact us today to see how we can work together to solve the access to finance challenge.

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