Landscape Report: Blended Finance for Agriculture

Financial institutions often find it challenging to serve the agriculture sector, primarily due to real and perceived risks, which in many emerging market agricultural value chains is exacerbated by high transaction costs associated with serving smallholder farmers and SMEs in rural areas. The public sector can provide important incentives to help address this situation and attract private sector investment at scale. Blended finance is an important tool for providing such incentives.This report provides an overview of blended finance in agriculture, including how it can be used to facilitate agricultural investments in emerging markets. It builds upon earlier work by Dalberg commissioned by AfDB, AGRA, DFID and IFAD on behalf of the SAFIN network in 2017. This report should also be contextualized by a current collaboration between OECD and SAFIN on the application of good practices for blended finance in the space of agri-SME finance for the realization of the 2030 Agenda. This report seeks to ask a number of guiding questions.