Microenterprise and Agribusiness

This article is available on pages 44-47 of this compilation document.

There are several way to link agribusiness and microfinance:

• Broaden and revamp agriculture credit programs/institutions to meet rural financial demands;
• Identify and build on microenterprise linkages that already exist: Microenterprises play a critical role in production efforts, but these linkages are mainly undocumented. Identifying backward linkages with microenterprises is the first step in determining where microenterprises can be improved to increase the quality and scale of larger agribusiness activities;
• Support value added microenterprise activities: an example would be to promote speciality food production, such as making mango chutney or drying mangos;
• Unleash microenterprise constraints: larger firms can lessen space and financial constraints of microenterprises through direct assistance. Working with microenterprises through intermediaries who broker microenterprise networks of production, packaging and transport, reduces costs.

Concludes:

• Microenterprises can be helped considerably through increased access to information, technology and a larger, higher income market;
• Efforts to increase the degree and value of linkages to larger agribusiness firms in high growth areas will contribute considerably to the growth of microenterprises.