Agricultural Finance Market Scoping Tanzania 2011.
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Transcript of Agricultural Finance Market Scoping Tanzania 2011.
![Page 1: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/1.jpg)
AgriculturalFinanceMarketScoping Tanzania 2011
![Page 2: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/2.jpg)
Sample & methodology
Sample drawn by National Bureau of Statistics (NBS)
Data collected by Synovate Tanzania
Listing & screening exercise provided the sampling frame
Identified 2 015 742 agri-businesses of which 519 972 qualified
4 094 face-to-face interviews were conducted with agri-business owners
3 734 interviews with producers
104 interviews with processors
256 interviews with service providers
The survey is representative at:
National, urban-rural, and agricultural zonal levels
(including Zanzibar) for producers
National level for processors and service provide
![Page 3: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/3.jpg)
Land-size and income-based selection criteria
applied
$600 or 5 acres of land for producers
$1,500 for non-producers
?
![Page 4: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/4.jpg)
Business types
![Page 5: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/5.jpg)
The problem …
• Smallholder & agri-business finance perceived as risky
• There is lack of financial services suited for agriculture
• Limited penetration of financial services
![Page 6: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/6.jpg)
AgFiMS Tanzania 2011 Business Owner Profile
![Page 7: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/7.jpg)
Business owners demonstrate entrepreneurial characteristics …
![Page 8: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/8.jpg)
Business owners manage their money wisely and are willing to take calculated risks
![Page 9: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/9.jpg)
Business owners make sound financial decisions
![Page 10: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/10.jpg)
AgFiMS Tanzania 2011 Business Environment
Is the environment conducive for these entrepreneurs to achieve business success?
![Page 11: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/11.jpg)
‘Ownership’ of land is a perception for most producers
More than 90% producers claim land ownership although less than 10% have title deeds
![Page 12: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/12.jpg)
Lack of access to irrigation systemsinhibits productivity
![Page 13: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/13.jpg)
Level of access to infrastructure not conducive for business activities, butmobile phones provide connectivity
![Page 14: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/14.jpg)
Limitations in the business environment results in distressed sales
Preferred Market?
Distressed sales?
12% sell on contract10% sell all products on
contract
![Page 15: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/15.jpg)
Agri-businesses have virtually no coping mechanisms to rely onwhen faced with business risks
![Page 16: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/16.jpg)
Income diversification offering protection?86.1% diversify their income sources
![Page 17: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/17.jpg)
Lack of access to networks &information increases vulnerability
![Page 18: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/18.jpg)
AgFiMS Tanzania 2011Financial Inclusion
![Page 19: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/19.jpg)
Business operations – Financial management
Banked Business owners who have or use any product or service from any commercial bank for the purpose of the agri-business
Served by formal non-bank and/or semi-formal non-bank financial institutions
Business owners who have or use any product or service from any regulated or registered financial institution which is not a commercial bank (e.g. SACCOS, MFIs) for the purpose of the agri-business
Formally served Business owners who are banked AND/OR who are served by formal non-bank and/or semi-formal non-bank financial institutions for the purpose of the agri-business
Informally served Business owners who use informal mechanisms to manage the financial matters of the agri-business. This would include services offered by agricultural associations or groups, input providers, VICOBAs, VSLAs, ROSCAs etc.
Financially served Business owners who are either formally AND/OR informally served for the purpose of the agriibusiness
Financially unserved/excluded
Business owners who are neither formally OR informally served for the purpose of the agriibusiness
![Page 20: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/20.jpg)
Sound financial decision-making does not result in high levels of financial inclusion for agri-businesses
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Quantifying the amount of credit in the AgFiMS market
BanksBanks SACCOsMFIs
SACCOsMFIs InformalInformal Friends/
familyFriends/ family
4% business owners
7% business owners
27% business owners
14% business owners
USD 36m68.9% of credit
11.7% of borrowers
USD 6m12.2% of credit
21.3% of borrowers
USD 8m15.1% of credit
79.3% of borrowers
USD 2m3.8% of credit
40.2% of borrowers
ASSUMPTIONS• Once-off per source•Ts 3,1m Bank• Ts300k SACCO/MFI• Ts100k Informal• Ts50k Friends/fam
ASSUMPTIONS• Once-off per source•Ts 3,1m Bank• Ts300k SACCO/MFI• Ts100k Informal• Ts50k Friends/fam
USD 52mUSD 52m•USD 300 on average•20% of turnover of those who borrow
•USD 300 on average•20% of turnover of those who borrow
![Page 22: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/22.jpg)
The role of the informal sector - Credit?
96% of all business owners who use
informal mechanisms use it for the purpose
of credit
96% of all business owners who use
informal mechanisms use it for the purpose
of credit
![Page 23: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/23.jpg)
AgFiMS Tanzania 2011 Identifying Development Needs
![Page 24: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/24.jpg)
Perceived obstacles to growth
![Page 25: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/25.jpg)
AgFiMS identified capacities needed for formal financial services usage
•Access to infrastructure
•Access to markets
•Access to/usage of credible financial advisory resources
•Access to/usage of credible business advisory resources
•Access to/exposure to appropriate agricultural advice/support
•Social capital – Access to networks & support structures; coping mechanisms
![Page 26: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/26.jpg)
The Future of AgFIMS?
Tanzania - first country where AgFiMS was undertaken
The aim is that it will be adopted for other countries across Africa
![Page 27: Agricultural Finance Market Scoping Tanzania 2011.](https://reader036.fdocuments.net/reader036/viewer/2022062422/56649f285503460f94c3ffe5/html5/thumbnails/27.jpg)
Who are behind AgFiMS?
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More information:
www.agfims.org
Financial Sector Deepening Trust (FSDT)
Mwallu Mwachan’ga
T: +255 22 260 2873/5/6
Gatsby Charitable Foundation (GCF)
Ian AndersonE:
[email protected]: 44 20 7410
0330
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Thank you…