Across Africa, agriculture remains both the continent’s most important economic sector and one of its most underfinanced. It employs over half of the total workforce and represents approximately 17% of Africa’s GDP, yet it continues to struggle to attract the scale and type of capital required to modernise and expand. According to the World Bank, only 1% of bank lending goes to the agricultural sector in Africa. The result is a persistent financing gap that limits productivity, constrains farmer incomes, and reduces resilience in the face of climate and market shocks.
At the heart of this challenge is not a lack of global capital. Financial institutions and private investors alike often hesitate to deploy funds into African agriculture because of one fundamental constraint: insufficient, fragmented, or unreliable data. Without reliable information on key metrics such as farm performance, production cycles, input usage, yields, or repayment behaviour, lending to smallholder or mid-sized farms becomes an exercise in guessing rather than evidence-based investment. In that context, it is not surprising that many banks default to collateral-heavy lending models that exclude the majority of farmers, or that private investors remain cautious about direct exposure to agricultural production.
The financing gap is staggering: in 2024, the International Finance Corporation estimated that SMEs across Africa faced a $117 billion financing shortfall. But this is precisely where digital tools and better data infrastructure can begin to reshape the equation.
Building Trust Through Data
The core problem in agricultural finance is not just access to capital but access to credible information. Many farming operations, particularly small and medium-scale ones, lack the formal records that banks require for underwriting. This creates a cycle where the absence of data leads to lack of financing, and lack of financing prevents the generation of better data. The World Bank has noted that “since MSMEs lack access to traditional credit facilities through banks and other traditional lenders, there is a shortage of credit data on MSME borrowers, also referred to as ‘thin file’ borrowers.”
Digital agriculture platforms can break this cycle. By capturing structured, real-time data across the agricultural value chain — from input distribution and planting decisions to field monitoring, agronomic support, and harvest outcomes — these platforms create a verifiable performance history for each farm. Over time, this transforms agriculture into a sector where risk can be measured, priced, and managed more effectively.
For lenders, the shift is meaningful. With the ability to evaluate farm-level performance data, they can improve credit underwriting, reduce default uncertainty, and ultimately lower the cost of capital for farmers.
Unlocking Private Capital
Much of the discussion around agricultural finance in Africa focuses on institutional actors, such as development finance institutions, multilateral banks, and government-backed programmes. While these remain essential, they cannot alone meet the scale of demand. A vast pool of private capital remains underutilised in agriculture, including impact investors, family offices, diaspora investors, and even retail investors. The challenge is that agriculture, as traditionally structured, does not present itself as an easily investable or transparent asset class.
Technology can change this. By introducing traceability and standardised data structures, digital platforms allow agricultural production to be packaged in a way that investors can understand and evaluate. When investors can see what is being grown, where it is being grown, how it is being managed, and what outcomes are being achieved, they are in a stronger position to make informed decisions.
This logic is also behind initiatives like the Africa Agriculture Accelerator Program, supported by the International Finance Corporation, which combines digital infrastructure, farmer data, and market access to help agricultural businesses become more investment-ready. The aim is to give financial institutions and private investors greater confidence to deploy capital into the sector. In this sense, data acts as a bridge between private capital and African farmers.
One of the most important conceptual shifts this enables is that farmers are no longer just producers of crops but also producers of data. Every interaction with a digital agricultural system generates information that can refine risk models, improve forecasting, and enhance financing decisions — provided the data is managed responsibly and farmers retain appropriate control and benefit.
The Multiplier Effect
The implications of closing the agricultural financing gap extend far beyond individual farms. Increased access to capital can lead to higher productivity, more stable supply chains, and improved food security. It also strengthens rural economies, creates employment, and reduces vulnerability to external shocks such as climate variability and global price fluctuations. The World Bank has argued that agricultural development is an especially pro-poor source of economic growth — about two to four times more effective in raising incomes among the poorest than growth in other sectors.
However, these outcomes depend on one critical enabler: the ability of capital to flow efficiently into the sector. Without reliable data infrastructure, that flow remains constrained.
Toward a More Integrated Financing Model
Ultimately, channelling more capital into African agriculture requires more than just better lending decisions; it calls for financing models built around how farming actually works. In practice, this can mean bringing together financing, insurance, and input partners to fund farmers throughout the production cycle, coordinating the procurement and distribution of inputs, providing continuous agronomic support during the season, aggregating harvests through structured off-take arrangements, and facilitating repayment based on crop sales. When managed well, this integrated approach helps mitigate credit, operational, production, and data risks, giving both farmers and capital providers greater confidence.
My own experience, including through the work we do at Complete Farmer with our CF Grower platform, has shown that when agricultural practices become more transparent, measurable, and structured, the sector becomes not only easier to finance but also increasingly attractive as a scalable investment opportunity. Digital platforms that make data continuous, transparent, and actionable are laying the foundation for a new kind of agricultural finance — one that is more inclusive, scalable, and appealing not just to institutions but to private investors seeking meaningful, real-world impact. The path forward lies in scaling these approaches collaboratively, across many players, so that capital finally reaches the farmers who need it most.
Desmond Koney, CEO of Complete Farmer, writes from Accra, Ghana.