Legal and regulatory policies impeding agri financing in Africa
May 27, 2022
3 minutes
AGRI-FINANCE by Hedwig Siewertsen
Drawing on lessons from East Africa, which may mirror those elsewhere in Africa, there are five main legal and regulatory policies that impede agricultural financing:
• This requires banks to provide loans based on expected credit loss (as opposed to actual occurred credit loss). Banks therefore shy away from risky sectors such as agriculture, because IFRS 9 requires them to make provision for losses more conservatively. The opportunity cost
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