1. Hivos – Harry Clemens KIT – Anna Laven

2. Value chain finance: learning from practice Microned, AgriProFocus Strategy Meeting on Value Chain Finance 19 November 2009

3. Amsterdam, The Netherlands www.kit.nl What is value chain finance? In value chain finance, a financial institution engages with the actors in the chain. This creates a triangle of cooperation. The triangle is between the seller, the buyer, and the financial institution.

4. Amsterdam, The Netherlands www.kit.nl Chain liquidity/agricultural finance

5. Amsterdam, The Netherlands www.kit.nl Value Chain Finance: an agreement between chain actors and (a) financial insitution(s) on: 1.The product that will be produced and sold; 2.The finance that is needed to produce and deliver the product; 3.The way in which the parties will communicate and exchange information; 4.The way in which risks are being managed. Key = shifting from credit risk to performance risk Key = trust

6. Amsterdam, The Netherlands www.kit.nl When is value chain finance relevant? Three value chain finance situations: Crafting new chains Expanding chain liquidity (Tanzanian Cotton) Unleashing investments in the chain (Honey Kenya, Fish India, Coffee Nicaragua, Quinoa Bolivia)

7. Amsterdam, The Netherlands www.kit.nl Unleashing investments in chain 1. Honey in Kenya: value chain before intervention

8. Amsterdam, The Netherlands www.kit.nl K-REP Group: different financial services -micro-leasing to beekeepers, enabling them to purchase and maintain hives, thereby increasing the quality and quantity of honey production. -loans to farmers for working capital and investment capital. -factoring, enabling smoothening of financial flows in the honey chain.

9. Amsterdam, The Netherlands www.kit.nl After the interventions…

10. Amsterdam, The Netherlands www.kit.nl Role of donors 1.Product development (f.e. micro-leasing) 2.Facilitator 3.Non-financial services

11. Amsterdam, The Netherlands www.kit.nl Part II – Discussion 1.Cotton Tanzania 2.Quinoa Bolivia 3.Coffee Nicaragua 4.Fish India

12. Amsterdam, The Netherlands www.kit.nl BioRe/Remei original cotton value chain

13. Amsterdam, The Netherlands www.kit.nl BioRe/Remai after intervention

14. Amsterdam, The Netherlands www.kit.nl Quinoa, original value chain

15. Amsterdam, The Netherlands www.kit.nl Quinoa, after intervention pro-rural

16. Amsterdam, The Netherlands www.kit.nl Original coffee value chain, Nicaragua

17. Amsterdam, The Netherlands www.kit.nl IDR and FDL support coffee chain

18. Amsterdam, The Netherlands www.kit.nl Fish in India, before intervention

19. Amsterdam, The Netherlands www.kit.nl Value chain after SIFFS’ intervention

20. Amsterdam, The Netherlands www.kit.nl Discussion How to smarten aid in VCF? Common ground to produce joint framework on VCF? What would be next steps? Niches in VCF? Space for complementarities and what are areas for collaboration? Suggestions to get local and international banking sector more involved?

21. Amsterdam, The Netherlands www.kit.nl Questions for panel debate? ……………………