Agrobanco and the Peruvian Ministry of Agriculture approached Rabo Development regarding a potential strategic partnership in early 2012, with the objective of developing Agrobanco into a privatised and sustainable bank that will support the development of Peru’s rural agricultural regions.
A fully state-owned bank established in 2002, Agrobanco plays an important role in providing finance to the agricultural sector. The bank’s core customer base comprises small‐ and medium-sized farms. The bank currently serves approximately 50,000 low-income farmers, with a specific focus on remote rural areas without easy access to alternative sources of financing.
In order to achieve its aim of sustainably increasing financial inclusion, Agrobanco must become an all-finance bank that provides both asset and liability products and has an expansive reach across rural areas in Peru. Agrobanco will only be able to compete with major commercial banks if it cooperates with other financial and microfinance institutions and builds a nationwide network with the scale required to develop a technological platform that will form the basis for alternative distribution channels.
While the cooperation with Cajas and MFIs will focus initially on developing a common transactional banking platform, other MFIs and agricultural producers are eventually expected to become shareholders in Agrobanco upon its privatisation. This consolidation will make it easier to operate in financial markets and will ensure more efficient use of capital. A network organisation is, however, foreseen in the initial stage that will focus on aspects that require economies of scale, such as transactional services.
In 2013, Rabo Development began providing technical assistance to support Agrobanco in preparing a five-year strategic business plan. The vision, mission and strategy of Agrobanco will be translated into more detailed actions and an implementation plan on several areas.
Rabo Development is expected to enter into a long-term technical assistance programme with Agrobanco that will commence in 2014.