Posts by Dan Zook
New research from the Initiative for Smallholder Finance reveals that approximately 290 banks in the developing world provide a total of $9 billion in local funding to smallholders – a lending rate that fails to meet 97 percent of smallholder demand for financing. To support smallholders effectively, banks must be able to lend at affordable rates, offer products specifically designed for farmers, and improve their accessibility to farmers.
As population growth and rising incomes create unprecedented demand for food, multinational companies increasingly rely on smallholders to secure their supply of agricultural commodities. As a result, smallholders present a compelling opportunity for buyers, lenders, and other actors in the agricultural value chain. However, smallholder production is often characterized by low yields, low quality, poor linkages, and little access to finance. A Dalberg report released Wednesday called “Catalyzing Smallholder Agricultural Finance” suggests that with increased financing, farmers can improve their yields and products and in some cases double their income.