Satisfying Smallholder Farmers Thirst for Finance
The Rural and Agricultural Finance Learning Lab, in association with Initiative for Smallholder Finance, released a new study ‘Inflection Point: Unlocking growth in the era of farmer finance.‘ The new study builds on the Dalberg’s 2012 Catalyzing Smallholder Agricultural Finance report.
The thirst for smallholder finance is staggering. Over 270 million smallholder farmers, the majority located in sub-Saharan Africa and Asia, require in excess of USD 200 billion in finance. Currently, less than a sixth is satisfied, mostly by formal financial institutions such as state banks and value chain actors.
Following a long period of one-dimensional thinking towards financing smallholder farmers, we have come to an age of increased diversity, where access to financial service providers, funders, market and research platforms, and technical assistance providers host more opportunities than ever before.
The overall conclusion remains that not enough is done, yet it is said that by doubling projected annual growth (from roughly 7% to 14%) the current providers would meet more than half the need by 2025. For further insight check out the report ”Inflection Point: Unlocking growth in the era of farmer finance”.