AGRO FINANCE

Financing Agriculture.

Agriculture of the most developing Countries is substance agriculture. The shift from subsistence to commercial agricultural production requires funds. However the livelihood of local people in most developing countries depends on agriculture. Financing for investments in agriculture is scarce even for large investors. Financial institutions are reluctant to accept the risks prevalent in the agricultural sector, such as droughts, floods, pests and diseases.

Challenges of Financing Agriculture.

Financing local farmers becomes difficult due to the risk factors and poor infrastructure. The risk accompanied with Agriculture include production risks linked to natural hazards (such as droughts, floods and pests), farmers’ weak ability to provide collateral assets (either because the farmer lacks title to land to offer as a loan guarantee or the value of the land may be too low) and the volatility of prices.

Financing Local Farmers and small agricultural entrepreneurs.

Farmers and small entrepreneurs need finance to allow them to expand production and diversify products. KEAS as an organization mobilizes finance, through community saving system and non-formalized group mechanisms. At our local area groups of men and women involved in farming activities can form organized groups. Such groups can lend each other and get external fund supports from our organization.

 

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