Agricultural enterprises in underserved and volatile economies face significant barriers to accessing adequate, affordable, and timely capital. These challenges stem from a combination of structural limitations—including financial informality, lack of collateral, and weak credit histories—as well as contextual risks such as political instability, currency volatility, climate shocks, and underdeveloped financial infrastructure. Despite agriculture’s central role in employment, food security, and GDP contribution across emerging markets, especially in Sub-Saharan Africa and parts of Southeast Asia, capital-raising for agro enterprises remains fragmented and fragile. This proposes a comprehensive and adaptive capital-raising framework tailored to the needs of agro-based small and medium-sized enterprises (SMEs) operating in high-risk or underserved regions. Drawing on existing literature, field case studies, and blended finance theory, this introduces a multi-tiered model that incorporates concessional financing, digital financial services, agri-insurance mechanisms, and risk-sharing partnerships between public, private, and donor actors. The framework is designed with three pillars: inclusiveness (targeting women-led and rural enterprises), resilience (embedding financial risk mitigation tools), and scalability (leveraging digital platforms and mobile penetration). Key innovations include the use of weather-indexed insurance to attract private investors, digital microloan platforms for early-stage agro ventures, and hybrid instruments that combine grants with performance-based equity or revenue-sharing arrangements. A case application in a conflict-prone agricultural zone illustrates how the framework mobilizes capital while reducing exposure for lenders and investors. By enabling better alignment between capital providers and agricultural enterprise needs, the proposed framework offers a pathway toward more sustainable and equitable rural financing. It also contributes to broader development goals by improving food systems, enhancing climate resilience, and promoting financial inclusion in economies most vulnerable to both economic and environmental shocks. Further research is recommended to test long-term impact and policy alignment mechanisms.
Otunba et al. (Sat,) studied this question.