Value Chain Finance Experiences April 25, 2017 Victoria Falls, Zimbabwe Mark Rostal

Kenya – Opportunities The largest economy in and the growth engine for East and Central Africa One of the most developed financial industries in Sub-Saharan Africa A forward-thinking Central Bank with an opportunistic and entrepreneurial approach to regulatory reform balancing stability, efficiency, and inclusion while encouraging financial sector innovation A financial services industry composed of a diverse set of increasingly competitive financial institutions focused on the base of the pyramid A world-class leader and trendsetter in mobile technology, payments and transfers Devolved government under the new constitution

Kenya – Challenges 36 million smallholder farmers (80% of the total population) are largely excluded from the financial sector 12.6% of people in rural areas have access to electricity .037% of agricultural land is irrigated Financial sector risk aversion Financial pricing and product customization Financial sector transparency Population growth Decreasing farm sizes Donors (multi-lateral, bi-lateral and foundations)

Our Financial Sector Approach Government – National and county partnerships Financial institutions – Strategy first, then structures, systems and skills Factor inputs – strengthening Agriculture value chains – financial flows mapping Loan guarantees

Successes Policy – CBK: DTM Bill and Agency Banking; RBA: Regulation G; AKCP: Credit Reference Bureaus Financial institutions – over 100 banks, deposit-taking MFIs, NGO MFIs and SACCOs Factor inputs – KBA, AMFI and iCow Agriculture value chains – over 50 products Loan guarantees – unintended consequences Bangladesh – National Bank policy on agriculture