1. Agricultural Finance Market Scoping Tanzania 2011

2. Sample & methodology  Sample drawn by National Bureau of Statistics (NBS)  Data collected by Synovate Tanzania  Listing & screening exercise provided the sampling frame  Identified 2 015 742 agri-businesses of which 519 972 qualified  4 094 face-to-face interviews were conducted with agri-business owners  3 734 interviews with producers  104 interviews with processors  256 interviews with service providers  The survey is representative at:  National, urban-rural, and agricultural zonal levels (including Zanzibar) for producers  National level for processors and service provide

3. Land-size and income-based selection criteria applied $600 or 5 acres of land for producers $1,500 for non-producers ?

4. Business types

5. The problem … Smallholder & agri-business finance perceived as risky There is lack of financial services suited for agriculture Limited penetration of financial services

6. AgFiMS Tanzania 2011 Business Owner Profile

7. Business owners demonstrate entrepreneurial characteristics …

8. Business owners manage their money wisely and are willing to take calculated risks

9. Business owners make sound financial decisions

10. AgFiMS Tanzania 2011 Business Environment Is the environment conducive for these entrepreneurs to achieve business success?

11. ‘Ownership’ of land is a perception for most producers More than 90% producers claim land ownership although less than 10% have title deeds

12. Lack of access to irrigation systems inhibits productivity

13. Level of access to infrastructure not conducive for business activities, but mobile phones provide connectivity

14. Limitations in the business environment results in distressed sales Preferred Market? Distressed sales? 12% sell on contract 10% sell all products on contract

15. Agri-businesses have virtually no coping mechanisms to rely on when faced with business risks

16. Income diversification offering protection? 86.1% diversify their income sources

17. Lack of access to networks & information increases vulnerability

18. AgFiMS Tanzania 2011 Financial Inclusion

19. Business operations – Financial management BankedBusiness owners who have or use any product or service from any commercial bank for the purpose of the agri-business Served by formal non- bank and/or semi- formal non-bank financial institutions Business owners who have or use any product or service from any regulated or registered financial institution which is not a commercial bank (e.g. SACCOS, MFIs) for the purpose of the agri-business Formally servedBusiness owners who are banked AND/OR who are served by formal non-bank and/or semi-formal non- bank financial institutions for the purpose of the agri- business Informally servedBusiness owners who use informal mechanisms to manage the financial matters of the agri-business. This would include services offered by agricultural associations or groups, input providers, VICOBAs, VSLAs, ROSCAs etc. Financially servedBusiness owners who are either formally AND/OR informally served for the purpose of the agriibusiness Financially unserved/excluded Business owners who are neither formally OR informally served for the purpose of the agriibusiness

20. Sound financial decision-making does not result in high levels of financial inclusion for agri-businesses

21. Quantifying the amount of credit in the AgFiMS market Banks SACCOs MFIs SACCOs MFIs Informal Friends/ family 4% business owners 7% business owners 27% business owners 14% business owners USD 36m 68.9% of credit 11.7% of borrowers USD 6m 12.2% of credit 21.3% of borrowers USD 8m 15.1% of credit 79.3% of borrowers USD 2m 3.8% of credit 40.2% of borrowers ASSUMPTIONS Once-off per source Ts 3,1m Bank Ts300k SACCO/MFI Ts100k Informal Ts50k Friends/fam ASSUMPTIONS Once-off per source Ts 3,1m Bank Ts300k SACCO/MFI Ts100k Informal Ts50k Friends/fam USD 52m USD 300 on average 20% of turnover of those who borrow USD 300 on average 20% of turnover of those who borrow

22. The role of the informal sector - Credit? 96% of all business owners who use informal mechanisms use it for the purpose of credit

23. AgFiMS Tanzania 2011 Identifying Development Needs

24. Perceived obstacles to growth

25. AgFiMS identified capacities needed for formal financial services usage Access to infrastructure Access to markets Access to/usage of credible financial advisory resources Access to/usage of credible business advisory resources Access to/exposure to appropriate agricultural advice/support Social capital – Access to networks & support structures; coping mechanisms

26. The Future of AgFIMS? Tanzania - first country where AgFiMS was undertaken The aim is that it will be adopted for other countries across Africa

27. Who are behind AgFiMS?

29. More information: www.agfims.org Financial Sector Deepening Trust (FSDT) Mwallu Mwachan’ga E: mwallu@fsdt.or.tz E: info@fsdt.or.tz T: +255 22 260 2873/5/6 Gatsby Charitable Foundation (GCF) Ian Anderson E: ian.anderson@gatsby.org.uk T: 44 20 7410 0330

30. Thank you…