ImpactAlpha, Apr. 3, 2018 –– The ‘S’ word is still sensitive for many investors (see “Do impact investments need subsidies?”). But more than two dozen funders, including the Skoll Foundation, the Gates Foundation, Rockefeller Foundation, Shell Foundation and MasterCard Foundation, are deploying “smart subsidies” to tilt global agriculture finance markets toward small farmers.
ISF Advisors (formerly the Initiative for Smallholder Finance) details strategies in a new briefing, “The role of grant funding in smallholder finance.” The smallholder-farmer finance advisory is aiming to kick-start investment into high-impact service providers.
- In short… The funders say grants and other concessionary capital should accelerate markets, not replace them.
- Catalytic levers… Such subsidies are “smart” if they reduce real and perceived risks of operating in emerging and frontier markets.
- New models… The Shell Foundation, Ceniarth, and Small Foundation are testing models of asset-financing – to reduce food loss, for example – to identify high-impact and high-growth opportunities in India and Africa.
- Follow ImpactAlpha’s full coverage… of Farmer Finance.