http://www.fao.org/
Public institutions need increasingly to be more ready to broker private capital flow for financially sustainable investment, while keeping a rigorous look at social returns that ensure most effective reforms. The presentation discusses how to overcome barriers and bring investment to scale.
Innovations for financial inclusion: policy, regulatory frameworks, indicators
1. Massimo Pera, Agricultural Finance Specialist and Project Coordinator, FAO
Investment Days 2017
Rome, 12 July 2017
Innovations for financial inclusion: policy, regulatory
frameworks, indicators
2. Main Barriers How to overcome them
High risks (and weak management and
mitigation strategies) ?
Lack of collateral ?
High costs (transaction costs, deferred
payments)
?
Asymmetric information and knowledge,
misperceptions
?
Low profits/lack of capacity to assess business
opportunities
?
Standardized general products that do not fit to
the complexity of the agribusiness environment
?
4. The leading role of the public sector: the CADENA
programme in Mexico
Federal Government
State Government
Private insurance
companies
Public insurance company
Eligible farmers in insured areas
80-90% of premium
10-20% of premium
Indemnity for area
insuredCash transfers
Source: FAO, 2014
5. ICT as a risk management tool in India
Source: YES Bank
6. Main Barriers How to overcome them
High risks (and weak management and mitigation
strategies)
Partnerships, proximity, leverage on existing
information, outsource technical assistance,
alternative delivery channels
Lack of collateral Collateralization of assets, advanced credit scoring
systems, client proximity
High costs (transaction costs, deferred payments) Identification of alternative delivery channels,
identify technical/institutional partners to bear non
financial costs, use of technologies
Low profits/lack of capacity to assess business
opportunities
Improve assessment techniques, leverage on local
knowledge, make use of new platforms, big data
Asymmetric information and knowledge,
misperceptions
Make use of new platforms, big data, ICT
innovations, alternative delivery channels
Standardized general products that do not fit to the
complexity of the agribusiness environment
Follow a client-centred design process, assess
interactions among value chain actors, do not apply
the “one-size-fits-all” rule.
7. THANK YOU FOR YOUR ATTENTION
Massimo Pera, Agricultural Finance Specialist and Project Coordinator, FAO
Investment Days 2017
Rome, 12 July 2017