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Value chains    
        
A product (or a service) is generally created in a process linking primary producers, input suppliers, buyers, processors, sellers and consumers in a value chain. Value chain analysis and promotion attempts to optimise any given value chain to meet market requirements, by harmonising the value chain actors, improving quality and productivity. This increases the competitiveness of the product against similar products, allows niche markets to be targeted and creates growth and new employment.

Typically the value chain approach involves identifying sub sectors and value chains to be promoted and then analysing and mapping the selected chain or sector. Following this various strategies for improvement may be identified such as upgrading markets or storage, organising producer groups to scale up supplies, linking input suppliers to producers or producers to buyers, identifying value adding activities or technologies which lower costs. How such advice or guidance can be delivered is an issue for policy-makers.

  
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TitleValue Chain Governance and Access to Finance: Maize, Sugar Cane and Sunflower Oil in Uganda
Author/ EditorJohnston, C.; Meyer, R.; USAID
Content Language(s)English
Type of Document Paper
Abstract / DescriptionValue chain finance leverages value chain relationships in order to successfully screen clients, monitor their activities, and enforce formal or informal credit contracts. Value chain relationships allow value chain lenders to resolve the same problems that financial institution lenders face: knowing whether the client will be able to repay, and deciding whether the client will be willing to repay.

The value chain governance structure is important in determining how well a finance provider within the value chain can screen and select clients, how well it can monitor their activities, and how effectively it can enforce contracts. Three value chains in Uganda were analyzed to better understand the relationship between governance and value chain finance.

Keywords VALUE CHAIN FINANCE; VALUE CHAIN GOVERNANCE
Country UGANDA
Date of Publication/Issue2007
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Number of Pages69 pp. / 15pp.
  
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