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# Smallholder Agribusiness Partnerships

Rural Finance

Lending for Smallholders who are engaged in Agribusinesses is one of the key features of the SAPP, which is called "value chain financing".

SAPP commenced extending its financial assistance at a concessionary interest rate of 6.5% per annum to the rural sector people, making smallholders to engage inclusively in value chain partnerships build by the SAPP, in particular, to serve the target groups supported under SAPP and co-finance the programme.

Lending for Smallholders who are engaged in Agribusinesses is one of the key features of the SAPP, which is called “value chain financing”. Beneficiaries and farmer groups built-in agribusiness partnerships and rural youth involved in agribusiness are privileged to receive loans. The products offered through a line of credit of SAPP mainly for the financing needs of farmers, including working capital and term finance, are not likely to be financed by formal banks unless the liquidity is provided externally to such banks. The mobilization of savings coupled with linking to formal markets facilitate farmers capital build-up over time, they will gradually increase their collateral capacities, reduce their risk exposure and will gradually enter into formal banking sector making them moving away from vicious cycle of debt. Savings will also be promoted as a habit.