Reducing Post-Harvest Loss and Improving Smallholder Livelihoods
The growth of Small and Medium Enterprises (SMEs) is essential in catalyzing inclusive agricultural growth in Africa. When smallholder farmers begin to produce at higher quality, efficiency, and volume, SMEs in offtake, processing, manufacturing, transportation, and distribution are the crucial links that farmers need to access markets for their agricultural products.
IGD, supported by the Rockefeller Foundation, hosted on March 15 in Dar Salaam, Tanzania, a marketplace workshop with some 40 key private sector leaders from Tanzania’s maize offtaking ecosystem to improve SMEs’ access to finance and find innovative solutions to access capital to grow their businesses. The offtaking ecosystem include SMEs that process maize into flour and animal feed, finance providers representing an array of products and services, and business advisory service providers.
Fostering business connections and offering insight into how to unlock access to capital to enable SMEs to grow their businesses, ultimately increasing offtake from smallholder farmers and reducing post-harvest losses through better business practices were highlighted throughout the workshop. The workshop was part of a series of IGD Advisory’s efforts to achieve efficiency in priority agriculture value chains.
Representatives from leading Tanzanian agribusinesses AECF, GroFin, AFGRI, AgDevCo, African Grant Advisers participated in engaging panel sessions on expanding SMEs’ access to finance. Peter Shao and Jones Govereh of AGRA led a morning session exclusively with SMEs on their matching grant opportunity. Oscar Opiyo of BCA Grain also presented on the benefits of silo and milling technology.
Without access to capital, many SMEs cannot take on more products to grow their capacity. Yet, working capital, debt facilities, growth investments, market linkages, access to new technologies, and knowledge are all necessary to SME growth. Consequently, SMEs often become roadblocks for inclusive agricultural growth instead of facilitators.
Each session featured opportunities for dialogue and discussion on the types of capital available for SME growth in the maize value chain. Throughout the workshop, participants emphasized a need for easier access to information about available financial, advisory, and technical assistance services with an emphasis on face to face engagement.
Professionalizing the “family business” mentality was highlighted as a key issue for both service providers and SMEs alike, recognizing that dipping into the business for family expenses and informal record keeping and governance structures were crippling their ability to qualify for finance.
“I learned that I need to focus on record keeping and improvement of company governance to grow my business,” acknowledged Peter Sanga, Khebhandza Marketing Co. Ltd.
At the conclusion of the workshop, participants said it was beneficial to hear directly from a representative about financing options and to ask more detailed questions on accessing capital.
Finance and business advisory service providers noted that the workshop helped them to better understand the seasonality and cash flow needs of businesses in Tanzania’s maize value chain and the high demand and potential for growth in value-added maize products.
“One learning from from the networking event was that I would much rather deal with aggregators who offer a value addition/processing option as opposed to mere traders as they require a steady year round supply of grain and are more inclined to build long term relationships with the farmers,” said Andrew Wallace of the Farm to Market Alliance
IGD efforts to strengthen agricultural value chains
Helen Mant, who leads IGD Advisory’s work with the Rockefeller Foundation, has worked to connect SMEs to financing across priority value chains by:
- Working with partners to identify and connect with high-growth SMEs within different value chains (mangos in Kenya and maize in Tanzania, to date)
- Identifying and connecting with local providers of alternative finance and business advisory/technical assistance
- Convening marketplace actors to facilitate networking and build understanding
- Continuing to share resources and build stronger networks through continued engagement via newsletters, webinars, and events
IGD will continue to make direct connections to finance providers and engage and support SMEs in Tanzania’s maize value chain through a newly established SME resources, including a WhatsApp group, webinars and focused workshops.
For more information on IGD’s Advisory services, please contact Helen Mant, IGD Senior Advisor, at email@example.com