Paper
Value Chain Finance
Significance of value-chain analysis in expanding financial services access
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This note provides an overview of the nature and potential of value-chain finance. Presenting lessons learned in using value-chain finance to promote agricultural sector development, it profiles some common forms of value-chain finance, and discusses the advantages and limitations of each.
The note lists the following lessons learned by using value-chain analysis in Mozambique:
- Design of interventions to expand access to agricultural finance services should be based on both, value chain and financial sector analyses;
- Financial institutions and donors can identify opportunities and prioritize interventions using the value chain analysis;
- Interventions that create links between small producers and downstream businesses are important in expanding financial services access;
- Value-chain financing is useful in addressing working capital demands;
- Exploitative relationships in value chains can be prevented by competition and access to information.
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