Inclusive finance and business models

Inclusive finance and business models

The private sector, non-governmental organizations and government agencies are increasingly promoting business and finance models that are both inclusive of smallholders and contribute to enhancing the environmental and social performance of agricultural production. Because models that manage to achieve these objectives develop in adaptation to their geographic, economic, and political context, developing appropriate policies and interventions to support scaling and replication has proven challenging for governments and development agencies.

It is increasingly recognized that in order to align business models to local sustainable development needs, to help address market participation, standards compliance, and the barriers faced by smallholders, strong coordination and learning amongst diverse stakeholder groups is required, as well as targeted financial services.

This priority is based on an action-research approach that combines the need to address knowledge gaps, while engaging with, and building the capacities of, key stakeholders. By ensuring that research is demand-driven, we will form the basis for developing business cases and attracting the buy-in from service providers and investors. This will also allow us to develop a better understanding of the learning and innovation processes and pathways that make inclusive business models effective and efficient, with emphasis on the institutional factors governing the relationships among value-chain actors, as well as with external input and service providers and regulatory stakeholders.

We will draw on ongoing value-chain research on livestock in Kenya and Tanzania, sugar and timber in Tanzania and Mozambique, oil palm in Indonesia, cocoa in West Africa, and beef/dairy and oil palm in Brazil.