Expert Consultation with Financial Service Providers: Understanding the sustainability issues agricultural producers need to consider to be investment-ready and access finance

The report identifies that financial service providers (FSPs) prioritize economic factors—specifically governance and business management—over environmental and social themes when assessing financial risk for agricultural investments. Key priorities include management experience, existing buyer relationships, land tenure, and projected cash flows. While climate change is the most important non-economic theme, with a preference for adaptation measures, social and biodiversity issues are often viewed as having more impact on sustainability than on financial risk reduction. The document recommends that agricultural producers seek capacity-building in business management and that voluntary sustainability standards (VSSs) integrate more economic criteria to help producers become more bankable.

• Financial service providers (FSPs) prioritize economic themes over environmental and social themes for reducing the financial risk of agricultural investments. Among these, governance is the highest priority, followed by business management.
• The four most critical economic criteria for FSPs to reduce financial risk and ensure economic impact are management experience and performance, information on existing buyers, proof of land-use rights or property ownership, and projected cash flows.
• Climate change is the third most important theme for FSPs when assessing financial requests, with climate change adaptation measures (65% high importance) being viewed as more critical for risk reduction than mitigation measures (47% high importance).
• FSPs place high importance on the formality and legality of agricultural entities, as investments in the informal sector are associated with higher risks.
• Proof of commercial relationships and profitability, such as sales contracts and recorded transactions, are highly relevant to FSPs and can serve as de facto guarantees for loans in place of physical collateral.
• Gender-specific measures are the most important sub-theme within the social dimension for reducing financial risk, although only 42% of FSPs rated them as highly important.
• FSPs show a lack of understanding regarding the financial risk associated with water conservation, biodiversity, and soil conservation, despite their importance to agricultural yields.
• There is a significant financing gap for smallholder farmers in developing countries, with an estimated annual demand of USD 240 billion compared to a supply of only USD 70 million.

APA

Nugnes, F., & Larrea, C. (2020). Expert Consultation with Financial Service Providers: Understanding the sustainability issues agricultural producers need to consider to be investment-ready and access finance. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/financial-service-providers-agricultural-producers.pdf

Chicago

Nugnes, Francesca, and Cristina Larrea. Expert Consultation with Financial Service Providers: Understanding the sustainability issues agricultural producers need to consider to be investment-ready and access finance. International Institute for Sustainable Development, 2020. https://www.iisd.org/system/files/publications/financial-service-providers-agricultural-producers.pdf.

Wikipedia

{{cite report |last1=Nugnes |first1=Francesca |last2=Larrea |first2=Cristina |title=Expert Consultation with Financial Service Providers: Understanding the sustainability issues agricultural producers need to consider to be investment-ready and access finance |publisher=International Institute for Sustainable Development |date=March 2020 |url=https://www.iisd.org/system/files/publications/financial-service-providers-agricultural-producers.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{nugnes2020expert, author = {Nugnes, Francesca and Larrea, Cristina}, title = {{Expert Consultation with Financial Service Providers: Understanding the sustainability issues agricultural producers need to consider to be investment-ready and access finance}}, institution = {International Institute for Sustainable Development}, year = {2020}, month = mar, url = {https://www.iisd.org/system/files/publications/financial-service-providers-agricultural-producers.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }