Financing Agriculture and Rural Areas in Sub-Saharan Africa: Progress, Challenges and the Way Forward

Abstract

In spite of investments and policy reforms, Sub-Saharan African countries lag in supplying financial services for agriculture and rural areas. New products, delivery channels, and partnerships, along with greater attention to savings, provide fresh optimism that this situation will be corrected. This paper examines several examples, with special attention to developments with savings groups and financial innovations with mobile phones and information and communication technologies (ICT). The telecom revolution and other innovations suggest that their use may leapfrog some difficult transportation and communication problems that drive up transaction costs and risks, and restrict financial inclusion for the poor.

Keywords: Agricultural finance, rural finance, credit, savings Sub-Saharan Africa

JEL Classification: Q14, O16, N57