Deals

Social lending alliance issues $564m to agri SMEs

The Council on Smallholder Agricultural Finance upped its lending by 56% last year, arranging loans for 658 businesses in 64 countries.

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An alliance of social lenders provided $564 million in loans last year to 658 small and medium-sized businesses across 64 countries.

The Council on Smallholder Agricultural Finance (CSAF) said in its annual report that it loaned $207 million (37 percent) to agricultural businesses in South America; $165 million (29 percent) to Central American SMEs; $104 million (18 percent) to Sub-Saharan African businesses, with the balance going to other regions around the world. Loan sizes varied from $50,000 to $2 million.

Last year’s totals were up 56 percent on the prior year, and continued growth is expected. CSAF is anticipating further growth of 20-25 percent over the next two years, according to a source close to the organisation.

CSAF characterises itself as an alliance of “impact-first agricultural lenders” focused on the funding gap for the so-called missing middle, or SMEs, in less affluent regions. Members include Alterfin, Oikocredit, Rabobank, responsAbility Investments AG, Root Capital, the Shared Interest Society and Triodos Investment Management.

The combination of rapid geographic expansion, especially in Africa and Latin America, diversification into new crops and the presence of a wider range of financial products and services has driven the growth in social lending, CSAF said in its annual report.

“As we have learned from other financial inclusion movements, such as microfinance, industry standards are critical for guiding responsible lending practices and orienting new entrants to this market,” it said in its annual report. “We are therefore working to build an inclusive, sustainable, responsible and transparent financial market.”