Improving Credit Allocation to Sustaiable Agriculture in Sub-Saharan Africa: Review of Carbon Sequestration Benefits

Abstract

Financing of agriculture by commercial and non-commercial institutions in rural Sub-Saharan African in recent years has being relatively constant despite remarkable increase in the number of institutions operating within this area. This development may be attributed to how these institutions rate the business of agriculture and the risks involved. However the slow pace of financing sustainable agriculture (biobased economy) in the presence of internationalization (Clean Development Mechanism CDM and voluntary carbon) needs to be analyzed. Diverse literatures are used in exploring the potential of “biobased economy” with emphasizes not just on carbon sequestration but agriculture value added and its effect on smallholder’s livelihood. The results suggest that if financial and non-financial institution reevaluate and reassess their stands on sustainable farming, development of sustainable agriculture in rural areas is inevitable. Constraint to agriculture financing due to lack of access to credit can be however be reduced if innovative and sustainable smallholders are identified.

Keywords: sustainable agriculture, agricultural credit, climate-change, certified emission reduction (CER).