Difference between revisions of "SPIS Invest"

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{{SPIS Finance}}{{Back to SPIS Toolbox}}
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=== '''<span style="color:#879637;">Module Aim and Orientation</span>''' ===
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{{Arabic Version|Toolbox on SPIS/ar}}
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Financing solar-powered irrigation can be an opportunity for financing institutions seeking to diversify their loan portfolio and expand their range of financial products. The '''FINANCE''' module focuses on product features for SPIS loans, considering direct financing by financial institution to a small and medium-scale agricultural end borrower. <span class="mw-customtoggle-SPIS3" style="font-size:small; font-weight: bold; display:inline-block; float:right; color: blue"><span class="mw-customtoggletext">read more</span></span>
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The module also points out how it is different from financing conventional irrigation systems. It provides guidance to financial service providers already financing or planning to finance SPIS. It thus addresses two groups:
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{{French Version|Toolbox on SPIS/fr}}
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*stakeholders at '''management level''' who decide upon credit policies of a financial service provider.
 
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*'''loan officers''' who assess single loan applications for financing SPIS.
 
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The '''FINANCE''' module, being part of a comprehensive toolbox, relates to the other modules in several ways. '''[[SPIS - Get Informed|GET INFORMED]]''', the first module of the manual gives basic information on SPIS and its components. Methods for its promotion are described in the '''[[SPIS - Promote & Initiate|PROMOTE & INITIATE]]''' module, including one process step on access to finance as an important precondition for promoting SPIS in a particular region. Natural limitations of the environment and a sustainable use of water and other resources are crucial when considering risks. These factors are described in the '''[[SPIS Safeguard Water|SAFEGUARD WATER]]''' module. The '''[[SPIS Design|DESIGN]]''' module provides information, tools and examples on how to estimate the dimensions of a SPIS for a specific farming situation. It also includes guidance on the calculation of the financial viability of SPIS which is critical to assess the loan (financing volume and profitability). The '''[[SPIS Design|DESIGN]]''' module aims at establishing the financial viability of a particular design, whereas the module '''FINANCE''' focuses on HOW to finance the respective SPIS design. The modules '''[[SPIS Set Up|SET UP]]''' and '''[[SPIS Maintain|MAINTAIN]]''' describe aspects to be considered when installing and maintaining SPIS. Checklists and other tools in these two chapters are of specific value to banks when paying visits to clients with a running SPIS.<br/>
 
 
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=== '''<span style="color:#879637;">Process Steps</span>'''<span style="color:#879637;"></span> ===
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Three steps are elaborated in the '''FINANCE''' module to support the process of defining the financial service provider’s credit policy on '''management level''': First the analysis of the potential of the SPIS market segment; secondly the determination of general credit risks involved; and thirdly, the design and test of suitable financial instruments. <span class="mw-customtoggle-SPIS6" style="font-size:small; font-weight: bold; display:inline-block; float:right; color: blue"><span class="mw-customtoggletext">read more</span></span>
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{{Spanish Version|Toolbox on SPIS/es}}
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<div id="mw-customcollapsible-SPIS6" class="mw-collapsible mw-collapsed">
 
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For the specific individual loan assessment process on '''loan operations level''', three main steps are elaborated: First, the determination of the financing volume and calculation of the profitability of the investment; secondly, the assessment of credit risk and collateral of the potential borrower; and finally, the determination of the cash flow and the repayment plan for the single potential client, along with loan conditions.
 
 
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=== '''<span style="color:#879637;">Chapters</span>'''<br/> ===
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'''1. [[SPIS Toolbox - Credit Policy: Analyze Potential|Credit policy: analyze potential]]'''<br/>
 
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'''2. [[SPIS Toolbox - Credit Policy: Risk Analysis|Credit policy: risk analysis]]'''<br/>
 
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'''3. [[SPIS Toolbox - Credit Policy: Select/develop Suitable Financial Instruments|Credit policy: select/develop suitable financial instruments]]'''<br/>
 
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'''4. [[SPIS Toolbox - Loan Assessment: Determine Financing Volume and Profitability|Loan assessment: determine financing volume and profitability]]'''<br/>
 
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'''5. [[SPIS Toolbox - Loan Assessment: Assess Credit Risk and Collateral|Loan assessment: assess credit risk and collateral]]'''<br/>
 
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'''6. [[SPIS Toolbox - Loan assessment: Adjust Repayment Plan to Cash Flow|Loan assessment: adjust repayment plan to cash flow]]'''
 
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=== '''<span style="color:#879637;">Supplementary Tools</span>'''===
 
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*'''[[:File:FINANCE – Farm Analysis Tool.xlsx|FINANCE – Farm Analysis Tool]]'''
 
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=== '''<span style="color:#879637">Further Readings </span>'''<br/> ===
 
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*Agriculture Finance Support Facility (AGRIFIN). Retrieved from [https://www.agrifinfacility.org/ https://www.agrifinfacility.org/]
 
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<span class="mw-customtoggle-SPIS30" style="font-size:small; font-weight: bold; display:inline-block; float:right; color: blue"><span class="mw-customtoggletext">read more</span></span>
 
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<div id="mw-customcollapsible-SPIS30" class="mw-collapsible mw-collapsed">
 
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*Making Finance works for Africa (2017): Agricultural & Rural Finance. Retrieved from [http://www.mfw4a.org/agricultural-rural-finance/agricultural-rural-finance.html http://www.mfw4a.org/agricultural-rural-finance/agricultural-rural-finance.html]
 
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*Microfinance Gateway‎ (2014): Highlighting noteworthy publications and key resources on rural and agricultural finance. In: Gateway Guide to Rural and Agricultural Finance. Retrieved from [http://www.microfinancegateway.org/library/gateway-guide-rural-and-agricultural-finance http://www.microfinancegateway.org/library/gateway-guide-rural-and-agricultural-finance]
 
  
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*AFRACO, FAO, the Land Bank of South Africa and the World Bank (2009): Expert Meeting in Managing Risk in Financing Agriculture. Johannesburg, South Africa. Retrieved from [http://bit.ly/2qnQ1GG http://siteresources.worldbank.org/EXTARD/Resources/336681-1252501755087/Joburg_proceedings.pdf]
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{{Back to SPIS Toolbox}}
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*Bandyopadhyay, A. (2007): Credit Risk Models for Managing Bank's Agricultural Loan Portfolio. Pune, India. In: Munich Personal RePEc Archive (MPRA) 5357. Retrieved from [http://bit.ly/2xeFHHN https://mpra.ub.uni-muenchen.de/5357/1/MPRA_paper_5357.pdf]
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{{Invest Text}}
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*Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH (2011): Agricultural Finance – Trends, Issues and Challenges. Retrieved from [http://bit.ly/2xdU9Qi http://www.ruralfinanceandinvestment.org/sites/default/files/06__giz2011-0460en-agricultural-finance.pdf]
 
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*International Finance Corporation (IFC) (2011): Scaling Up Access to Finance for Agricultural SMEs Policy Review and Recommendations. Washington D.C., USA. Retrieved from [http://bit.ly/2w7Bjqi https://www.ifc.org/wps/wcm/connect/04da89804a02e2e19ce0fdd1a5d13d27/G20_Agrifinance_Report.pdf?MOD=AJPERES]
 
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*International Finance Corporation (IFC) (2012): Innovative Agricultural SME Finance Models. Washington D.C., USA. Retrieved from [http://bit.ly/2xgGRQE http://www.ifc.org/wps/wcm/connect/55301b804ebc5f379f86bf45b400a808/Innovative+Agricultural+SME+Fi- nance+Models.pdf?MOD=AJPERES]
 
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*Mees, M. & Destrait, F. (2015): Guarantee Funds: A Response to Agricultural Credit Risk – The Latin American Guarantee Fund. SOS Faim Belgium‎. In: Zoom Microfinance 44. Retrieved from [http://bit.ly/2wx19Iu https://www.microfinancegateway.org/library/guarantee-funds-response-agricultural-credit-risk-–-latin-american-guarantee-fund]
 
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*Prasoon, P. K., Pareek, A., Natu, A. J., Ledesma, J. & Barman, N. D. (2014): Resource Book on Designing & Delivering Agriculture Financing Products. Retrieved from [http://bit.ly/1vpgeRg http://www.microsave.net/files/pdf/Designing_Delivering_Agriculture_Financing_Products.pdf]
 
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*SOS Faim (2013): Developing rural finance through public-private sector cooperation. In: Zoom Microfinance 40. Retrieved from [http://bit.ly/2wGyagM https://www.sosfaim.lu/en/publication/developing-rural-finance-through-public-private-sector-cooperation/]
 
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=== '''<span style="color:#879637">Annex - Collection of Formulae </span>'''<br/> ===
 
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*'''[[SPIS Toolbox - Finance - Annex|Link]]'''
 
 
{{SPIS Magic Words}}
 
{{SPIS Magic Words}}
  
 
[[Category:SPIS_Toolbox]]
 
[[Category:SPIS_Toolbox]]

Latest revision as of 14:49, 6 December 2021

Get informedPromote & InitiateSafeguard WaterMarketInvestFinanceDesignSet UpIrrigateMaintainSPIS Invest.svg
TRAINING
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ABBREVIATIONS
GLOSSARY
PASSWORD


Module Aim and Orientation

Financing solar-powered irrigation can be an opportunity for financial institutions seeking to diversify their loan portfolio and expanding their range of financial products. The INVEST module focuses on the product features for SPIS loans, considering direct financing by financial institution to a small and medium-scale agricultural end borrower. read more

The module brings out the difference of financing solar powered irrigation as compared to conventional irrigation systems. It provides guidance to financial service providers who are already financing or planning to finance SPIS. It thus addresses two groups:

  • Stakeholders at management level who decide upon credit policies of a financial service provider.
  • Loan officers who assess single loan applications for financing SPIS.

Process Steps

Three steps have been elaborated in the INVEST module to support the process of defining the financial service provider’s credit policy at the management level: Firstly, the analysis of the potential of the SPIS market segment; secondly, the determination of general credit risks involved; and thirdly, the design and test of the suitable financial instruments. read more

For the specific individual loan assessment process on loan operations level, three main steps have been elaborated: Firstly, the determination of the financing volume and calculation of the profitability of the investment; secondly, the assessment of credit risk and collateral of the potential borrower; and finally, determination of the cash flow and the repayment plan for the single potential borrower, along with loan conditions.

Chapters

1. Basic decision-making tools
2. Credit policy: Analyze potential
3. Credit policy: Risk analysis
4. Credit policy: Select/develop suitable financial instruments
5. Loan assessment: Determine financing volume and profitability
6. Loan assessment: Assess credit risk and collateral
7. Loan assessment: Adjust repayment plan to cash flow

Supplementary Tools

Tutorial Videos

Further Readings

read more

Annex - Collection of Formulae

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