Tipping the climate finance balance - investing in climate adaptation to prevent food insecurity

CASA aims to drive global investment for inclusive climate-resilient agri-food systems that increase smallholder incomes. The programme makes the case for increased agribusiness investment by demonstrating the commercial and development potential of sourcing models involving empowered smallholder producers and by tackling the information and evidence gaps holding back investment. As part its effort to promote resilience in agri-food systems and as a result of the renewed commitments of the UK government towards tackling climate change, CASA is putting finance mobilisation for agriculture climate adaptation at the heart of its work. This has informed the research and investor engagement of the programme for the last 12 months, resulting in the identification of areas that require additional investment and research to start tipping the climate finance balance towards adaptation. Small and medium-sized enterprises (SMEs) play a vital role in agricultural and food systems in developing countries. The landscape of agri-SME finance in sub-Saharan Africa and Southeast Asia is increasingly pluralistic. However, these enterprises are largely underserved by formal finance. In sub-Saharan Africa and Southeast Asia, there is an estimated USD 160 billion demand for financing by around 220,000 agri-SMEs. Only USD 54 billion (around 34%) is currently being met through formal finance channels, leaving an annual financing gap of USD 106 billion.