Enabling environment: Recommendations
To help create an enabling environment governments and regulatory authorities should:
2.1 Establish the systems and mechanisms so that SMEs can compete rather than concentrating political and economic connections in a small number of large enterprises, which tends to exclude more dynamic SMEs from accessing support.
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The underserved middle: Defining excluded enterprises in agricultural value chains [15 pages]
clarifies the concepts of the ‘missing middle’ in terms of access to finance and the ‘hidden middle’ in terms of access to regulatory authorities. The report also identifies the key roles in the broader enabling environment that are essential for addressing the challenges facing agri-SMEs.
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Understanding the ‘underserved middle’ [59 minutes]
reflects on financing gaps and needs, with the discussion drawing on published data and market analysis to provide clarity to the investor community on opportunities for investing in SME agribusinesses sourcing from smallholder farmers.
Or read: the one-page summary of the video
To help create an enabling environment governments and regulatory authorities should also:
2.2 Be aware that consistent engagement at the political level is essential to drive the commitment to setting agricultural sector targets and to reduce perceptions of risk for investors.
2.3 Focus on the significant potential for local SMEs to become off-takers to small-scale farmers who are seeking to enter commercial production.
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Bridging demand and supply of private investment capital for small and medium sized enterprises [56 pages]
breaks down the market in a comprehensive and holistic way to show where finance is specifically flowing and recommends ways for addressing the current agri-SME finance gap.
To help create an enabling environment governments and regulatory authorities should also:
2.4 Policymakers and donors should support efforts to clarify legal frameworks for carbon finance and initiatives to improve smallholder security of land tenure, such that both smallholder farmers and the private sector can benefit from the associated opportunities.
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examines the role carbon finance could play in the transition of smallholder agriculture to a more sustainable, productive and resilient future.
Updated March 2023
Summary of recommendations for governments and regulatory agencies