Financing Sustainable Agriculture in Sub-Saharan Africa: A Review of the Role of Financial Technologies

Abstract

African agriculture needs to adapt to climate change and shift from unsustainable production practices to sustainable ones. This requires innovative, substantial, and long-term agricultural investments that can allow all agricultural actors to adopt sustainable agricultural practices. Better and more inclusive options to leapfrog Africa’s sustainable agricultural development lie in financial technologies (FinTech). FinTech uses digital technology innovations to ease the provision of financial services to users and thus enhance financial inclusion. The aim of this study is to clarify the important role that FinTech can play in financing sustainability in agriculture in sub-Saharan Africa (SSA). To examine this role, the study shortlisted 17 SSA countries. The literature on FinTech-enhanced agricultural initiatives in these countries was reviewed. The results confirm that FinTech has the opportunity to become the much needed ‘support system’ for sustainable agriculture in SSA. Most of the financial products accessed by smallholder farmers in the selected countries helped the farmers in addressing production and marketing challenges in agriculture. The technologies can also help to improve efficiency in financing smallholder agriculture, enabling wider adoption of sustainable agricultural practices. To promote the financing of sustainable agriculture at scale, there is a need to train the farmers about the functionality of digital platforms, and policymakers need to address challenges such as gaps in infrastructure between the urban and rural areas.