Developing Inclusive Models of Value Chain Financing

Abstract

This paper presents a framework for designing external financial intervention mechanisms in the form of partnership agreements between financial institutions and different economic participants involved in the farm machinery supply chain. The scope of these partnership agreements is to facilitate small farmers’ access to loans when purchasing agricultural equipment. The research methodology and research results are drawn from desk and field research conducted on the emerging agricultural market. Several inclusive conceptual models of financing mechanisms based on business relationships between financial institutions, small farmers and either the suppliers of agricultural equipment or buyers of agricultural outputs are presented.