" #Ethiopia is amongst those with the most extreme disparity between the share of GDP accounted for by agriculture and the sector’s share of credit" - from an upcoming Precise policy study looking at financing agriculture @ObaOumer @EyobTolina @AbebeAbebayehu

Ethiopia’s agricultural sector and rural enterprises significantly lags behindurban and industrial sectors when it comes to access to credit and in financial inclusion in general (i.e., access to deposit facilities, payment services and insurance instruments amongst others)

“… the independent business case for financial service provision in agriculture simply does not exist without government subsidy and support; particularly when banks weigh agricultural service provision against lending to government treasuries or more profitable segments...

...of the economy, such as telecommunications, infrastructure, & extractive industries.… A recent analysis of bank portfolios in East Africa found a -1% Return on Assets for agri-SME lending vs. an average of 3-5% Return on Assets for lending in other sectors. This represents...

This represents a quantified opportunity cost of 4-5% for banks.” (ISF, 2020)

Unsurprisingly, given the realities facing private sector financing for rural & agricultural development, gov'ts around the world have had to step into the breach and play a leading role in providing capital for agricultural development, tailored to its specific needs

Examples of such gap filling institutions are #Kenya’s Agricultural Finance Corporation, a state-owned institution tasked with agricultural finance and rural development, and Canada’s Farm Credit Corporation, which describes its mandate as “providing specialized & personalized...

..business and financial services and products to farming operations, including family farms, and to those businesses in rural Canada, including small and medium-sized businesses, that are businesses related to farming.”