The problem
Small and medium-sized agricultural businesses are key to driving rural economic development in eastern Africa.
These ‘first mile’ businesses play a vital role in connecting small-scale farmers to wider markets by buying their produce or supplying inputs and services to them.
However, the first mile market is failing due to agricultural small and medium-sized enterprises (SMEs) lacking the business skills and access to finance they need to invest, professionalise or develop.
The growth of agricultural SMEs is being stifled, as is the productivity and profitability of small-scale farmers who depend on their services.
The opportunity
Establishing local savings associations and assisting SMEs in applying for loans injects much-needed capital into agricultural markets. This financial support helps businesses expand, improve their operations and increase profitability.
With training in financial and business management, SMEs learn about the range of financial services available to them and develop the skills to prepare and present credible business plans.
Training helps small businesses professionalise and become viable enterprises, thereby attracting more funding and reducing poverty. This training makes SMEs more robust, better managed, better prepared for growth and, vitally, a safer prospect for commercial lending.
The outcome
Agricultural SMEs are one of the most important players in the development of the agricultural economy.
When SMES thrive, they drive growth in rural economies, creating jobs within the SMEs as well as enabling smallholder farmers to access the good, services and markets they need to thrive.
For example, first mile businesses connect the small farm’s front gate with larger markets that buy their produce. They amalgamate crops from a number of farmers and sell their produce together to larger food manufacturers.
They provide the goods and services farmers need to increase their productivity and incomes, such as improved seeds, animal feed, milling, cleaning, packaging, transport and equipment.
Source
Source: Farm Africa Results Framework 2023
How we support businesses
Farm Africa guides the development of agribusinesses with the potential to revolutionise the business environment smallholder farmers operate in.
Activities cater to the specific needs of each business, but include:
- Supporting companies to identify their weaknesses and providing bespoke training in management, financial and technical skills.
- Helping enterprises develop professional business cases and prepare for due diligence processes to support loan applications from banks.
- Mapping out the players working across value chains to identify new activities that can make the enterprises a positive return on investment.
- Facilitating mutually beneficial contracts between farmers, buyers, suppliers and traders.
- Identifying and tackling the obstacles facing female and youth-led businesses.
The latest on supporting businesses
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