Conflict-Affected States
This note explores challenges of developing rural and agricultural finance in conflict-affected states. The note explores demand considerations such as identification of clients and their financial needs. It also examines supply side considerations such as value chain enterprises and retail providers, and requirements in terms of the enabling environment. The note describes necessary and preferred preconditions for rural and agricultural finance development. They include:
- Sufficient economic activity to warrant provision of financial services;
- Relative stability of economic and financial prospects of potential clients;
- Existence of a reasonable level of safety and security;Presence of a functioning banking system;
- Supportive enabling environment for financial service provision;
- Low inflation;
- Availability of a skilled and educated workforce;
- Increasing levels of trust within communities and in financial institutions.
Donors and practitioner should draw insights from best practices when considering rural and agricultural finance development in conflict-affected states. They include early and broad interventions, promotion of industrial best practices concerning financial services, careful use of grants, and collaboration with other stakeholders.
