NO fewer than 450 million smallholder farmers are supporting about two billion householders globally, Microfinance Information Exchange (MIX) report has said.
MIX is an intelligence platform for socially-responsible investors focused on inclusive finance in emerging markets.
The report said smallholder farmers constitute one of the single largest market segments for financial inclusion, yet the finance available is small.
The report said only $50 billion, which represents a quarter of the estimated total need of the population, is the supply of financing available to them.
Part of the issue is that financial service providers face high resource constraints to develop and deploy financial products that meet the needs of smallholder farmers, the report added.
The report noted that one of the key factors impeding the flow of funds to smallholder agricultural opportunities is the lack of information.
It noted: “Not only does this clog the funding pipeline, it also constrains the development of financial products tailored to the unique needs of smallholder farmers.Therefore, providing the information required by lenders and financial service providers (FSPs) is critical to reducing the financing gap in the segment.‘’
In 2016, the report said MIX worked with the Council on Smallholder Agricultural Finance (CSAF) and One Acre Fund to analyse the lending of its nine member-organisations, identifying relative strengths and challenges of lending in major commodities, markets and types of borrowers.
In 2015, it said CSAF members extended a combined U$ 597 million in short- and long-term credit to producer organisations and small and medium scale enterprises (SMEs) in 66 countries, connecting more than 2.1 million smallholder farmers to domestic and international markets.