Mapping of Digital Solutions to Support Financial Services Providers in Assessing Climate Impact on Agricultural Portfolios (English)

Climate change can affect agriculture in multiple ways, leading to increased production risks that impact the viability of farm businesses and their credit risk profile. Financial institutions are not able to assess the viability of an agricultural producer beyond the business risks. This information and skill gap has been recognized by not only the financial institutions themselves, but also by digital solution providers, who have recently begun to tap into this business opportunity. These solution providers offer services, which are either directed at banks and value chains or adjacent to these, in assessing the viability of a farm based on its specific soil, crop and climatic conditions. The market of digital solutions to assess climate risk impact on agricultural portfolios of financial services providers is growing in size and coverage rapidly. This report is the result of a mapping exercise to ascertain the status quo of tools and providers on both a global and a targeted market level. The study mapped solution providers and categorized them based on use case offering in a three-step process. Mapping began with desk research which was global in scope but then narrowed to focus on tools and digital service providers operating in developing economies. From this, complementary interviews with a sub-set of the providers were used to establish a decision tree and detailed profiles that could guide Financial Services Provider (FSPs) looking to leverage digital solutions and integrate them into their lending processes.