Appendix 1

Diversity of agricultural financing needs by agro-ecological zone in Western Africa

An attempt to synthesize financing problems by type of stakeholders x agro-ecological zone and activity system.

Agro-Ecological Zone
Dry Sahelian Zones		Forest	Irrigated Zones	Cotton Zones	Peri-urban Zones
Activity system
Dry crops without build-up. Weak diversification (market remoteness).	Extensive, more or less settled, animal farming; major trade zones.	Diversified system supported by plantings.	Irrigated crops (rice, market gardening).	Integrated systems.	Small-scale activities: trade, small-animal husbandry, market gardening.	Family farming businesses, such as animal production.
Risk Level
Greatly subject to climatic risks.	High (climate, health).	Unfavourable evolution of production in global markets.	Protected from risks of drought.Frequent single-crop farming.	Protected from market risks (before liberalization of systems).	Weak: diversification, strong competition.	Health risks. Risk related to competition in the urban and import markets.
Constraints
Priority to food and to food self-sufficiency. Seasonal fluctuations in revenue. Low market integration.	Management of herds. Significant mobility of animal farmers.	Major level of investment. Deferred profitability.	Investments in irrigation system. Frequent single-crop farming. Seasonal revenue fluctuations.	Seasonal fluctuations in revenue.	Non-financial constraints often significant; access to land; access to agricultural council	Major investment. Technical management often insufficient.
Financing Potential
Limited by low level of credit-worthy demand.	Risky. Possible with diversified activity system, especially trade.	Financing by planting segment.	Large and relatively secured.	Large volumes. Securing mechanisms need to be rebuilt.	Credit for diversified activities.	Small business financing.
Need to Finance Operations – Short-Term Credit
Weak lean-season credit.	Animal food. Health. Pre-harvest.	Inputs, labour for main crop and associated crops.	Large volumes, seasonal credit.	Large volumes,: seasonal credit.	Large volumes, working capital.	Working capital.
Need to Finance Operations – Medium-Term Credit
Marginal.	––	Equipment.	Power pump. Animal traction or small-scale mechanization.	Animal traction or mechanization equipment.	Power pump. Means of transport.	Equipment, means of transport.
Need to Finance Operations – Long- Term
––	––	Planting or replanting.	––	––	––	Buildings, land.
Need to Finance Operations – Savings
Low capacity for savings.	Strong competition from traditional savings.	––	––	––	––	––
Need to Finance Operations – Insurance
––	––	––	––	––	––	––

Sources: CERISE

CIRAD Dakar seminar materials.Additional information from IFAD.