n African Journal of Science, Technology, Innovation and Development - Financial lending and investment in sustainable small-scale agribusiness in sub-Saharan Africa : a review of carbon sequestration and welfare benefits

Volume 4, Issue 2
  • ISSN : 2042-1338
  • E-ISSN: 2042-1346
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Expansion of operations by rural financial and non-financial institutions in developing countries has prompted the enactment of regulations and emphasis on risk management by national supervisors. However, lending to smallholders especially sustainable framers and financial investment in small-scale climate mitigation and adaptation agriculture has not seen substantially increased. The impact of financial institutions on anti-climate-change agricultural practices and sustainable development has been advocated by a number of researchers. This study examines ways of using the opportunities provided by climate-change to reverse existing disconnect between smallholders and small-scale agribusinesses and financial institutions. Using available literature on sub-Saharan banking, climate change investment and economic development, this paper explores support mechanism for investing in climate-friendly agriculture and the possible integration of mitigation payment into Credit risk management. The collaboration between financial institutions and smallholders is an appropriate foundation for relationship building which will ease credit constraints, improve information asymmetry and increase agricultural investment.

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