CFIs for Sustainable Risk Proofing in Value Chain Financing: Instances from the Asia Pacific Region

C. S. Sundaresan ()
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C. S. Sundaresan: Green Ventures and Consulting Pvt Ltd (GVC)

Chapter Chapter 37 in Advances in Applied Economic Research, 2017, pp 565-576 from Springer

Abstract: Abstract Agriculture is prone to high levels of risk emanating from natural, operational, financing, and market sources. These risks get transmitted to the agribusiness value chains to establish operational efficiency, in turn to make value chain financing risky and unsustainable. At a theoretical level it relates to the returns to scale trade framework (Krugman, Increasing returns and the theory of international trade, 1985) and the sustainability imperatives of businesses. This paper therefore suggests that there remains a close relation between sustainability environment and financing risks in a trickle down and trickle up frames. The format of organizations at the farm and value chain levels determines the financing risks. Community empowerment and integration of value chain partners proves to be much risk easing in financing the value chains. The community financial institutions (CFIs) potentially can be the ideal organizational format to sustain value chain financing in a risk free ambience through peer pressure and local networking across chain partners. The paper establishes that social, economic, and environmental sustainability will add to social development and therefore the risk levels in financing the farm economies and the value chains will reduce.

Keywords: Risk proofing; Value chain; Asia Pacific region (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-319-48454-9_37

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DOI: 10.1007/978-3-319-48454-9_37

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