Access to finance for farmers, As climate change shines a light on food security, eAgronom’s Robin Saluoks explains how agrifintech could unlock funding for an underbanked group.
As climate change shines a light on food security, eAgronom’s Robin Saluoks explains how agrifintech could unlock funding for an underbanked group. From ruined crops due to heatwaves, grain hostage taking in the Black Sea and worrying levels of food price inflation, agricultural sustainability and food security have suddenly been catapulted into mainstream news from relative obscurity. Access to finance for farmers, At the same time, investments in the space, in particular agritech and its subset agrifintech, are growing rapidly. The smart agriculture market, for example, is forecast by some to grow by 10% CAGR to US$20.8bn by 2026, while others put the number of the global agtech market as a whole at US$32.5bn by 2027.
With demand for food set to increase by 70% by 2050 while the world’s resources are being rapidly depleted, Access to finance for farmers, it is no surprise that agriculture has become a hotbed for innovation in the last few years. Having come under the spotlight as an industry has also laid bare one of the biggest obstacles for farmers to thrive and adopt more sustainable practices: access to finance. Due to the cyclical nature of agriculture, many farmers require some sort of financing to tide them over until the next harvest. According to the World Bank, half of the world’s farmers are unbanked. That is 440mn farmers. Despite common misconceptions, around 95% of global farms are smallhold with less than five hectares of land, which produce 80% of food for some regions, including Asia and sub-Saharan Africa. Although agricultural challenges vary immensely by geography, access to finance is a universal problem for farmers across the world. In India, for example, only 30% of farmers have access to institutional financial support, while 70% remain underserved. In many parts of Europe, on the other hand, farmers are forced to make agreements with their agricultural input suppliers to agree financing options at inordinate rates.
Source: This news is originally published by fintechmagazine