Experiences of innovation in financing for actors of the Agrifood System

Background

In a context of climate change and the accelerated degradation of natural resources, the persistence of poverty and lags in productivity, and considering the impact of the pandemic produced by COVID- 19 in Latin America and the Caribbean (LAC), the region is faced with the imminent challenge of transforming agricultural and food systems into more productive, sustainable and resilient models, so that the region continues being a pillar of food and nutrition security and of poverty reduction worldwide.  This transition process must adhere at all times to the ethical imperative that "no one can be left behind" to achieve a "recovery with transformation", which needs to be financed through the coordination of innovative public and private efforts to recover from the current health, economic and social crisis.  In this sense, the outlook is not auspicious, especially for groups that historically have faced problems accessing financing: family farmers, small and medium cooperatives, micro small and medium agri-food companies, and associations. According to data from the World Bank (2016)[1] in LAC, 38.2% of small companies access bank loans or credit lines, compared with 66.4% of access to banking services by large companies.

Under this premise, financial inclusion appears as a response to productive insertion through the timely and adequate promotion of groups largely excluded from the financial system, based on a range of regulated financial products and services. Likewise, financial inclusion allows for the expanded use by all segments of society through the implementation of innovative actions, whether personalized or common, that include education and financial knowledge in order to promote well-being, economic and social inclusion (OECD, 2012)[2].

Meanwhile, innovation can serve as a catalyst for financial inclusion for small and medium-sized companies that make up food channels, increasing the diversity of instruments and capital sources of the financial system. Promoting financial inclusion through innovation of instruments and digitalization for access and diversification of financing sources, seems to be an imperative in highly turbulent times such as those we will experience in the coming years.

Objective

The objective of this virtual seminar is to share a regional view on financial inclusion, exchange experiences on instruments, sources and innovative strategies in the field of investment financing and working capital for actors of the agri-food system with difficulties in accessing it.

Methodology 

The space will have two parts:

1. Context presentation, by a regional entity, which will provide an overview of the current state of financial inclusion in Latin America and the Caribbean.

2. Panel conversation that will address different cases of innovations in terms of financial inclusion mechanisms. The moderator, Dulclair Sternadt, Partnerships Officer of FAO Regional Office for Latin America and the Caribbean, will ask three rounds of direct questions to the guests.