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Business Advisory And Financial Services

Business Advisory and Financial Services

BACKGROUND

Business advisory and financial services are vital for unlocking growth potentials and managing risk in Uganda’s agricultural market. Business Advisory Services (BAS) are available but currently serve larger companies, focused mainly in Kampala. Agri-Small and Medium Enterprises (SMEs) do not tap into these services due to a lack of awareness and the costs. Moreover, the business development services promoted by non-profits and donors have often failed to demonstrate the value proposition of their services, and rural market actors wait for free services to get to them; service providers market towards the donor community rather than the Agri-SMEs themselves. Most of the available financial products and the business models employed by financial service providers (financial institutions, fintech, insurance companies, and others) are not well aligned with opportunities in agricultural markets, most of the formal services are not well inclusive and are mostly urban-based. Feed the Future Uganda Inclusive Agricultural Markets (FtF IAM) Activity envisages a scenario where business advisory service providers explicitly target sales to agribusinesses to improve management, inclusive access to finance (including Ag-Insurance), and profitability to scale inclusive business models. The Activity also ideates financial service providers designing new products that target smallholder farmers and agribusinesses.

OBJECTIVES

  1. Business advisory firms test, adapt, and actively market BAS to Agri-SMEs and support Agri-SMEs to raise capital and improve practices.
  2. Local BAS design, adapt and sell commercial products/service packages to small local agribusinesses.
  3. BAS introduces new linkage products to stimulate business transactions between multiple stakeholders and Agri-SMEs.
  4. FinTechs, Fis & MNOs continuously improve and scale digital financial services to achieve greater financial sustainability.
  5. Insurance companies sell more policies to smallholder farmers.

APPROACH

The Business Advisory and Financial Services intervention supports the following:

  • FIs, Fintechs, and MNO continuously offer cost-effective financial products and services to rural or underserved clients.
  • International and Local BAS providers to target and provide Agri-SMEs with appropriately priced and diversified products/services that meet their needs, and for which they are willing to pay.
  • Insurance companies to collaborate with fintech, FIs, and large agribusinesses to market agricultural insurance to many smallholder farmers.

EXPECTED RESULTS

Results under this intervention are measured by the following:

  • FIs, FinTechs, and MNOs increase the number of active agent outlets in underserved areas, number of SHFs utilizing the services, value of transactions by SHF (savings, transfers, loans), and mobile phone uptake. They will also continuously improve and scale digital financial services, achieving greater financial sustainability.
  • International and local BAS providers to adapt and actively market BAS to Agri-SMEs, support Agri-SMEs to raise capital and improve practices and grow their number of paying Agri-SME clients.
  • Ten local BAS will adopt new practices and actively market services, build their networks, and earn fees from supporting at least 50 local Agri-SMEs to raise capital and improve practices.
  • At least four local BAS providers to organize and hold commercially driven business to business events in 2022, market and attract relevant stakeholders to the events, increase their client database and make money through the expansion of their advisory business.

 

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