1. The World Bank and Financing for Agriculture Third Agribank Forum on Value Chain Financing Nairobi, Kenya, October 16-18, 2007 Session 6 – Dialogue on Experiences and Trends Renate Kloeppinger-Todd Rural Finance Advisor The World Bank

2. Main Messages of the 2008 WDR on Agriculture The lack of financial services in rural areas is a major obstacle to the growth of profitable agriculture and related activities Building on innovations of local institutions in developing countries, rural financial services can be provided to smallholder farmers Financial services can be effective tools for poverty reduction in rural areas

3. However, there is a huge problem! –Nearly 3 billion poor people worldwide lack access to the basic financial services to manage their precarious lives –In two Indian states, 87% of marginal farmers have no access to formal credit and 71% have no access to a savings account –In Nepal, only 16% of rural households have a bank account –In Bangladesh, only 27% of small and marginal farmers have access to formal sources of credit.

4. What does the WDR propose to increase financing for agriculture? Financial leasing for investment finance Establish credit reporting bureaus Explore and pilot-test technological innovations Support to institution-building and proper product development Working through supply chains Working with public and recently- privatized agriculture development banks

5. Support to “good” policies and an enabling environment Interest rate policies Laws on land and other property rights Establishment of registries Development of risk management instruments Index-based weather insurance Hedging instruments for commodity price risks Past and ongoing World Bank programs ……continued

6. Determination and dissemination of good practices for different delivery channels Leasing Financial cooperatives Community-based organizations New initiative on Financing for Agriculture Credit risk management Use of innovations Past and ongoing World Bank programs (continued)