In its efforts to improve access to financing through tailor-targeted financial solutions, the Fiji Development Bank (FDB) has adopted the Agriculture Value Chain Financing (AVCF) method.
The Bank commenced financing through the value chain last December with the launch of the Rice Mobility Package in conjunction with the Fiji Rice Limited.
According to FDB Chief Executive Officer (CEO) Saud Minam, the Bank is in the process of developing a similar solution for ginger, dairy and other agricultural products and he said “beauty is that all these will be accessible digitally through FDB Web Portal.”
“We are working closely with our stakeholders to develop solutions guided by the value chain financing model for these commodities,” said Minam.
“The advantage of this concept is that it connects farmers to a guaranteed market which then allows them to access financing and technical assistance more readily. The value chain model will also allow processors to secure consistent supply.”
“For the small to medium-size farmers, this method will offer a mechanism to obtain financing that may otherwise not be available due to a lack of collateral or transaction costs of securing a loan and it can be a way to guarantee a market for products.”
The CEO stated that the AVCF facility will encourage a large proportion of semi-subsistence farmers to move into commercial production through sustained access to competitive markets.
“This method will further assist the farmers in diversifying their agricultural production. By branching out, farmers will be able to increase the number of sources of revenue for their farms,” said Minam.
The figure below outlines the Agriculture Value Chain mapping.
“On a national level, AVCF supports the Government’s plan to promote self-sufficiency in the production and export of non-sugar agricultural products.”
Minam said the model supports food security and business growth which helps to achieve sustainable development goals such as poverty reduction, food security, gender equality, decent work and economic growth.
“The Rice Mobility Package is a multifaceted financial solution designed to mobilize rice farmers from subsistence to commercial farming whereby they can be part of a resilient value chain that guarantees them more than just access to a market.”
“With such assistance packages, we can boost the production and demand for locally produced goods, which will assist our farmers as well as the economy at large.”
“Increased local rice production can help our economy in terms of import substitution and the same is for dairy products. As for ginger – this has been a strong export commodity for Fiji and assistance to ginger farmers through this financing method will further boost this sector,” Minam added.