The Role of Finance and Public Development Banks in Promoting Sustainable Agriculture Around the World

Following the growing interest in the potential catalytic role of PDBs in contributing to Agenda 2030, this paper reviews relevant literature to map out the range of approaches and instruments available to PDBs to strengthen their role in promoting more sustainable, green and resilient food systems. The paper places particular emphasis on small-scale farmers and MSMEs. PDBs have a potential to intervene with traditional and innovative products, through their own networks or leveraging suitable partners, to reach the last mile. PDBs can also catalyze private funds. The appendix to this paper contains case studies where PDBs innovate in the areas of customer-relationships, product portfolio composition, technical assistance and funding through blended solutions. These examples show that PDBs can simultaneously pursue sustainability and financial inclusion goals. However, PDBs are diversified and some are not yet fully aligned to the target of a green inclusive transition. While PDBs have played a counter-cyclical role in recent crises, the financial quality of their assets, especially of their loan portfolio, could be strengthened. These weaknesses must be addressed to strengthen PDBs’ financial and social performance. Platforms that allow networking, alliances and joint actions among PDBs, with support of strategic partners, contribute to achieve this goal.