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farming means business
Bridging the Gapin Agricultural Finance
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1990 ING Advisory in CEE
Technical Assistance
1998 Active in Asia & Russia post-crisis
Restructuring & turnaround work
2002 Part of ING FIG
Interim Management activities added
2007 MBO of Financial Access; Washington link established
Private Equity & Structured Finance
2012-13 Emerging Markets network expansion
Hong Kong, Bangkok and Nairobi offices operational
Washington DC
London
Hong Kong
Amsterdam
NairobiBangkok
Financial Access is headquartered in Amsterdam with operations in key emerging markets (see www.financialxs.com). We have particularly strong capabilities and experience in Sub Sahara Africa, South East Asia and the Middle East and North Africa region.
We excel in putting together teams of highly capable finance and banking experts, tailoredto the needs of our clients. Our professionals combine expert skills and a proven trackrecord with deep local knowledge and global expertise.
International presence: = Operational hubs; = Representation / FA partner firms.
Financial Access
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Data supplied by the Kenya Bankers Association2014 statistics
Agr
icu
ltu
re
Agr
icu
ltu
re
Agricultural Finance Gap
Very low
farming means business
The Agrifinancing programmes
3-year programmes designed to:
Stimulate lending to the Food & Agriculture Sector(s)
organized as a Public Private Partnerships
sponsored by the Government of the Netherlands
executed with partners in the field: SNV and ScopeInsight
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farming means business
Dutch Government
Private SectorPPP
Objective: To increase lending from financial institutions
to Agribusiness SMEs and POs
Innovative products / risk mitigation (Credit Scoring & automated workflow processes)
Agri-finance know how and expertise
Active pipeline building
Agribusiness Graduation programs
Coordination, transparency, sharing
AgriFinancing : the Partners
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farming means business
Why Banks do not like Agriculture
To entice banks to lend morewe have to address theirspecific risk issues and costconcerns.
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farming means business
Bridging the GAP
The F4A projects are strongly interrelated and designed to leverage off each otherand work towards a common goal: BRIDGING THE GAP in agricultural finance.
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F4A = interlinked projects [bankers vs farmers]
farming means business
Bridging the GAP
Three challenges
input finance
valuechain
finance
CAPEX lending
+ +
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working capital
Post-harvest
Pre-harvest
farming means business
Bridging the GAP
Value Chain Finance
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What is Value Chain Finance ?
farming means business
Bridging the GAP
This is Value Chain Finance
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farming means business
Bridging the GAP
This is Value Chain Finance
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farming means business
Bridging the GAP
Definition of Value Chain Finance
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Optimizing cash flow
throughout Value Chains
through
the discounting of
receivables
to achieve
Early Payment for
Suppliers / Farmers
farming means business
FARMERS
GRN$50/30
$50 / DAY 30
BUYER
Farmer will generally not send invoices to BUYERS, but will instead receive a
Goods Received Note(“GRN”)
Existing situation: payment on day 30-60-90
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farming means business
FARMERS
$50 / DAY 30
payment$48
$2
interest
T2
T30
$50
(re)payment
- immediate payment- reduced uncertainty- no collection costs- increased security
- less fraud
Early Payment through REVERSE FACTORING
FARMERS
GRN$50/30
BUYER
FACTS pays now … and collects from Buyer
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farming means business
FACTS highlights
• FACTS is about providing short term credit – it’s notanother technology payment tool (but we do have a lot oftechnology);
• Sometimes called receivables financing, supplier credit ofreverse factoring;
• We rely on strong Buyer/Supplier(s) relationships and takerisk on the Buyer, not on the smaller Suppliers;
• Business model geared towards domestic transactions – asopposed to international trade;
• FACTS goes live in Q1/2016 in Kenya and Uganda
• Looking at Tanzania and Rwanda as a next step.
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farming means business
A Global USD 2.5 trillion market
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farming means business
www/factsafrica.com (beta)
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