This discussion forum has been formed to enable members and visitors of the Rural Finance Learning Centre to communicate their own experiences on the topic of risk management in lending to agriculture and to comment on those others have presented as well as offering views and opinions on the conclusions of the Johannesburg meeting. The papers presented at the Johannesburg meeting and the abbreviated conclusions can be viewed in the: Rural Finance Learning Centre. The aim of the Johannesburg meeting being that of offering experiences and thoughts that can be transformed into practical, follow-up activities that will improve lending to the agricultural value chain, we would like to invite you to provide real examples and experiences that you feel confirm or, as the case might be, question the Johannesburg conclusions and/or add value to what was concluded.

The investment needs in the agricultural sector are huge but due to the high risks associated with the uncertainties that accompany agricultural practices, lending to the sector has remained insufficient and agricultural production has as a result continued to be much lower than its actual potential. With emerging crises, new knowledge about risk-management business models that support the provision of finance and the banking industry is required. Presently many financial institutions continue to lack adequate credit risk evaluation instruments and skills and management techniques to help them begin the radical transformation that will motivate them to establish agricultural lending as a profitable business segment.

Given that the main financial risk facing rural financial institutions is credit risk, what are the credit risk management techniques used that you can report on and what are the factors that contribute to a successful credit risk management?

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