How Can Matching Grants in Agriculture Facilitate Access to Finance? Lessons Learned from World Bank Group’s Experience

Abstract

Matching grants are an instrument aimed at promoting private sector development that have been used extensively over the past years, in particular for agriculture development. this paper focuses on three specific issues: (1) What is the rationale for using matching grants in agriculture and why does the financial sector matter? (2) What has been the specific experience with WBG matching grants for agriculture and what are the key drivers of success? (3) What are the various models of linkages with financial institutions and how can matching grants be used to promote financial inclusion? Based on this analysis, this paper suggests emerging good practice on when to use matching grants for agriculture, and how to design them in a way that promotes sustainable impact and linkages with the financial sector.