Climate-Smart Agricultural Finance (CSAF): A model for sustainable investments in agriculture

Oluwatosin Omotola Ajayi 1, Adekunle Stephen Toromade 2, * and Ayeni Olagoke 3

1 University of Bradford, UK.
2 Department of Agricultural Economics, Ladoke Akintola University of Technology, Nigeria.
3 Towdah Farms, Nigeria.
 
Review Article
World Journal of Advanced Research and Reviews, 2024, 24(02), 001–011
Article DOI: 10.30574/wjarr.2024.24.2.3291
 
Publication history: 
Received on 18 September 2024; revised on 2274 October 2024; accepted on 29 October 2024
 
Abstract: 
Climate-Smart Agricultural Finance (CSAF) integrates environmental risk assessments into agricultural lending models to promote sustainability and climate resilience. This paper explores the significance of CSAF in mitigating climate-related risks, improving farm productivity, and enhancing long-term economic stability for both farmers and investors. It outlines the mechanisms through which CSAF promotes sustainable agriculture, such as the use of green bonds, sustainability-linked loans, and carbon credit financing. Additionally, it analyzes the benefits of CSAF, including improved climate resilience, risk mitigation, and financial returns for investors. The paper concludes with recommendations for improving CSAF models, emphasizing financial inclusion, enhanced data collection, and public-private partnerships to promote wider adoption. CSAF offers a promising path toward building a more sustainable and resilient agricultural sector in the face of climate change.
 
Keywords: 
Climate-Smart Agricultural Finance; Sustainability; Climate Resilience; Environmental Risk Assessment; Sustainable Agriculture; Agricultural Lending
 
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