The greatest financing needs in agriculture are often where traditional finance is least willing to lend. Farmers and agricultural small and medium-sized enterprises (SMEs) operate in environments characterized by seasonal cash flows, climate and commodity price volatility and fragmented markets. Many agricultural businesses lack substantial fixed assets, instead generating revenues and value linked to future harvests and supply chain relationships. This presents challenges for traditional lenders, who typically require 150-200% collateral for their financing products. Financing is therefore scarce during the pre-harvest period, when farmers and agribusinesses require working capital for inputs and operations.
In this Insight Brief, One Acre Fund, One Acre Ventures and Clarmondial’s Food Securities Fund are presented as distinct examples of how blended finance can be applied to address financing constraints in agriculture. This set of agrifood system insights illustrates how blended finance structures can be tailored to different investment strategies, financing needs, and actors across agricultural value chains. It also demonstrates the diverse roles that concessional guarantees can play in mobilizing commercial capital, from providing loan portfolio protection, to supporting lending to aggregators and facilitating enterprise-level borrowing through balance sheet guarantees. Finally, the case studies highlight how acceleration support can help translate deep sector expertise into bankable blended finance vehicles by supporting fund design, refining investment strategies, improving fundraising readiness, and developing impact frameworks.