For some young agribusiness entrepreneurs, the biggest barrier to growth is not whether their businesses can generate returns, but whether lenders can recognise that potential without conventional collateral.

Participants at the Africa Food Systems Forum 2026 in Kigali argue that financial institutions should give greater weight to business performance, reliable records and market arrangements when assessing young agribusinesses’ ability to repay loans.

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The call came during a session on Special Investment Programmes for Youth and Women in Africa on September 1, which brought together young entrepreneurs, financial-sector representatives and food systems stakeholders.

For Juliette Nyiranzeyimana, founder and managing director of Juliette Serving Horticulture Ltd, access to finance and business support helped transform a small horticulture venture into an expanding agribusiness.

She started the company in Nyamasheke District in 2014 with Rwf5,000, partly motivated by concerns over youth unemployment.

"I started from a small capital of Rwf5,000. What made me enter agricultural business was that, at that time, the country was concerned about youth unemployment,” she told The New Times.

The company grows and aggregates avocados, French beans, chillies and tomatoes, mainly for export markets.

Through the Shora Neza programme, implemented in partnership with the World Food Programme (WFP) and supported by the Mastercard Foundation, Nyiranzeyimana received training in agricultural practices, market access, business management and record keeping. She later accessed Rwf5 million in financing to expand the business.

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She now works with about 1,800 farmers across 10 districts through a network covering more than 2,000 hectares.

However, accessing larger financing remains difficult for businesses without conventional collateral.

"At one point, I applied for a Rwf30 million loan [from a financial institution], but because they did not properly understand the business model, agriculture, its mechanisms and its cycle, they did not give me the money unless I provided collateral,” Nyiranzeyimana said.

"That is a challenge for us because we do not have collateral, yet the business is clearly a profitable one.”

The financing challenge also extends to supply contracts. Even when agribusinesses have secured buyers and contracts for their produce, such agreements are not always recognised by lenders as security, making it difficult to raise the working capital needed to fulfil the deals.

Agricultural financing must also reflect production cycles, as delays can mean missing planting seasons or failing to purchase inputs on time.

Building a track record

The discussion highlighted a wider problem: potentially profitable agricultural businesses can struggle to secure credit because they lack conventional security or sufficient records to demonstrate their performance.

Elijah Mwashayenyi, Head of Knowledge Transfer Africa at East-West Seed Knowledge Transfer Foundation, said proper record keeping and business planning can give lenders evidence of a farmer’s ability to manage credit and generate returns.

He cited a financing model piloted with Centenary Bank and development organisation ADA in Uganda, where farmers receive training in business planning and good agricultural practices, maintain production records and are certified before approaching the bank.

"A lot of farmers don&039;t keep records. A lot of farmers don't do business planning,” he said.

Mwashayenyi said 99 per cent of trained and certified farmers received loans, with a 97 per cent repayment rate.

By comparison, only about half of untrained farmers accessed loans, while their default rate was 20 per cent, compared with 3 per cent among trained farmers.

The model has certified close to 2,000 farmers and is being expanded to Nigeria, Ghana and Tanzania, he said.

The experience suggests that verified business performance, production records and planning can strengthen borrowers’ credit profiles where conventional collateral is limited.

Reducing lending risks

Martin Fregene, Director of Agriculture and Agro-Industry at the African Development Bank, said overcoming the collateral challenge also requires financial instruments that reduce risks for commercial lenders.

"Agriculture financing must be designed around those constraints,” Fregene said, pointing to limited collateral, market access and weak financial records among some young businesses.

He said partial credit guarantees, patient capital and structured debt could help de-risk lending and enable businesses to grow.

Speakers also highlighted aggregation as a way to reduce risks in Africa’s fragmented agricultural sector.

Ayodeji Oludare Sotinrin, Managing Director and CEO of the Bank of Agriculture Nigeria, said lenders can work with aggregation companies serving thousands of farmers rather than financing smallholders individually.

"We need to bulk finance through farm aggregation companies,” he said.

Aggregation can give lenders better visibility of production and market data while helping farmers connect with buyers and fulfil supply contracts.

Richard Choularton, Director of Climate and Resilience Service at the World Food Programme, said agricultural investment also needs to combine finance, skills and market access.

"Integrated pathways, pathways that are built to meet young people where they are, that are built with empowerment in mind,” Choularton said.

He called for longer-term support to help young entrepreneurs build sustainable businesses.

Nyiranzeyimana aims to expand the area covered through her farmer network from about 2,000 hectares to at least 20,000 hectares by 2030.

Achieving that goal, she said, will require financing that recognises the realities and performance of agricultural businesses rather than relying solely on conventional collateral.