Clive Tasker, the CEO of Standard Bank, has taken the road less travelled in Africa's banking sector. He is betting big on financing small-scale farmers.
With a presence in 19 countries in the continent including Kenya (through CFC Stanbic), the bank is seeking to balance the equation of helping Africa to exploit its virgin expansive land seen as one of its most valued assets.
"Our interest in agriculture is because we believe sub-Saharan Africa can provide a solution to food security in the world. Africa should be a global food supplier," said Mr Tasker in an interview in Accra, Ghana.
According to figures by the International Fund for Agriculture Development (Ifad), Africa has about 12 per cent of the world's arable land but 80 per cent of that is uncultivated.
Only seven per cent, Ifad says, is irrigated compared to 40 per cent in Asia, indicating the huge opportunity for investments in agriculture in the continent.
Africa's food production per hectare is 1.7 tonnes compared to Europe's at five tonnes per hectare as shown in recent studies by Alliance for a Green Revolution in Africa (Agra), World Bank, and Food and Agriculture Organisation (Fao).
Standard Bank announced in September that it will commit Sh800 million for lending to groups of small-scale farmers in four African countries, building on its previous commitments.
The bank is banking on the fact that the private sector in Africa is increasingly playing a larger role in agriculture unlike before when governments were key players in financing.
Private sector participation is increasing in food processing, supply management, linking farmers to formal markets.
Financing agriculture in Africa has been dismally low because of the risk factors banks see in the sector.
Banks find it difficult, for example, to predict the lending risks to agriculture because production may be affected by many factors while penetration of farm insurance is low.
Lending is also affected by severe change of pricing especially when there is oversupply immediately after harvest where prices can change by up to 200 per cent.
The low lending disregards the fact that agriculture contributes an average 25 per cent of annual wealth in most of sub-Saharan Africa.
In Ghana, where the contribution is as high as 30 per cent, lending to agriculture is only five per cent of total bank loans, according to the Bank of Ghana.
Financing agriculture, however, is just one of the challenges facing Africa in the quest for sustainable food supply in the continent.
Last month, agriculturalists, financiers, policy makers and lobbyists meeting in Accra, Ghana under the Africa Green Revolution Forum came up with a blueprint they said should be implemented.
While most countries have policies, the challenge is the guidelines have been overtaken by events like the fast-changing technology, showing that reviews had been given priority.
Gunning for a revolution in farming, Africa had to invest in regular updates of the guidelines that should be in tandem with global changes, the forum said, adding that a group of countries could work as a bloc to benefit from a pool of knowledge and experience.
Such blueprints, the meeting agreed should encourage empowerment of women, starting with schoolgirls, who should be told success stories and examples of successful female agriculture entrepreneurs and small-holder farmers.
Based on the benefits of economies of scale, women should be trained in mechanised farming, use of inputs, and the curriculum should be upgraded to be richer in gender and nutrition subjects.
Such steps, they said, would recognise the burden of the woman as a farmer and home manager.
Besides equipping women to produce more and efficiently, the Accra meeting reiterated the need for establishing purchase schemes to provide markets.
As a way of achieving economies of scale, farmers were advised to work in groups.
"The farmers' organisations must be supported to enable them identify how they can add value to their harvest, gain business skills and access financing," said the communiqué released at the end of the forum.
It recommended that governments reform property rights to enable predictable land ownership and strengthen contract enforcement law.
Mixed farming is seen as a buffer against food insecurity, using either to a supplement in case of failure.
While farmers were preparing to enter the bigger markets, they would also benefit from increased urbanisation and improving incomes in Africa, the meeting heard.
"Small holder farmers can improve their fortunes through livestock farming aided by private public partnerships to provide better slaughterhouses and expanded marketing channels," the statement said.
"What is required to ensure livestock contribute adequately to food security is results-driven research on best breeds, livestock insurance, financing of livestock trade and developed livestock cooperatives," it added.
To develop markets for staples like maize and oil crops, farmers needed more efficient and affordable post-harvest storage handling to cut losses especially through poor storage, the experts said.
For high value crops, including pyrethrum and coffee, there is need to strengthen farmers' organisations, increase the flow of information on growing, harvesting and marketing the crops.
Although there are national commodity exchanges, these were found to be inadequate, leading to the proposal that regional blocs would boost value-added marketing and storage by investing in bigger markets.
Commodity exchanges are seen as a major missing link in the efforts to add value to agriculture sub-sector.
They provide an entry point for financial service providers to play a key role in agriculture.
"Exchanges eliminate the counter party risks. If a farmer brings commodities, they are assured of payment. They help cut off destructive middlemen," said Elemi Gabre Madhin, the CEO of the Ethiopian Commodity Exchange.
She said, however, that exchanges must have enough volumes and players to make sense.
"They require capturing more than one per cent of the commodity within a country. To make these possible, governments must provide well functioning infrastructure and set other conditions right to enable farmers deliver."
Access to improved seeds must be paramount in government policies, they said.
"Seed sector must be supported and proper policy on intellectual property developed in order to promote private sector seed breeding. Governments must strengthen regulatory services to enforce existing laws, improve farmers knowledge on improved seeds, repair existing seed infrastructure, set up regional centres for the commercial diagnosis of vegetative propagated crops like cassava, yams and sweet potato."
The meeting said private public partnerships should be clearly defined to separate facilitation and regulation roles from production and marketing, improved access to better seed, credit and insurance services. This would achieve faster decision making and planning.
Access to inputs and increased use of fertiliser, they said, behoves governments to upgrade port facilities by allowing private sector participation, reduce taxes and non-tariff barriers, and encourage bulk procurement.
"In Mali and East Africa, I have seen how use of fertilisers has resulted in yields increasing by 130 per cent," said Mr Kofi Annan, who chaired the Africa Green Revolution Forum in Ghana.
Although a controversial subject, the meeting recommended that governments arrange "smart subsidies," which farmers should not rely on but only enable them to grow adequate food.
Agro-dealer networks, they said, would be used to ensure farmers access inputs with ease and at affordable cost.
Limited financing and drought have confined small-scale farmers to subsistence agriculture and perennial hunger.
However, fortunes could improve if the growing interest in Africa's farm lands bear fruit.
In Kenya, the Qatari government is expected to lease 40,000 hectares in the Tana Delta to grow food crops.
Biwako Bio Laboratory, a Japanese company, is eyeing 30,000 hectares of land for jatropha while in Nyanza, HG Consulting of Belgium is seeking 42,000 hectares sugarcane and Dominion Farms Ltd has invested in 17,500 hectares in Yala.
Canada's Bedford Biofuels is also on the verge of putting some 160,000 hectares of land under jatropha production.
But as interest is growing, agriculturalists and environmentalists have asked governments to work on laws to guide these leases.