About

The Initiative for Smallholder Finance is a multi-donor effort designed to demonstrate how specific products and services can expand the reach of financing for smallholder farmers. Initiative activities include targeted market research, product development and testing, and investment facilitation in the smallholder finance market. Sponsors of the Initiative for Smallholder Finance include the Citi Foundation, Ford Foundation, KFW Development Bank, MasterCard Foundation, Skoll Foundation, and USAID.  The Aspen Network of Development Entrepreneurs, Business Action for Africa, Business Fights Poverty, CGAP, Root Capital, and TechnoServe provide advisory support.

The Initiative for Smallholder Finance has three primary functions: to conduct research, to facilitate communications among market participants in different parts of the agricultural finance supply chain, and to broker investment opportunities between market participants.


Purpose

Why did we create the Initiative for Smallholder Finance? The world’s 450 million smallholder farms could help feed the world, but most smallholders lack funds to invest in their farms to improve productivity and connect to markets, and most are unable to access credit to enable them to do so. A directional estimate of smallholder demand for financing suggests the market could be as large as $450 billion, the vast majority of which is unmet.
Growing global demand for agriculture commodities, along with consumer preferences, have interested leading buyers in sourcing from smallholder farmers. Meanwhile, growing demand and rising food prices have led to renewed donor focus on the agricultural sector. This momentum makes agricultural investment a timely opportunity for buyers and investors. Still, the smallholder financing market is in its early stages and is undeveloped, fragmented, and undercapitalized.
The release of the report Catalyzing Smallholder Agricultural Finance in September 2012, authored by Dalberg with support from the Citi Foundation and Skoll Foundation, has helped to focus banks, investors, donors, and companies on meeting the financing needs of smallholder farmers around the world. Now, the Initiative for Smallholder Finance helps those entities turn that attention into action.
The Initiative for Smallholder Finance is building the essential research and development infrastructure across the industry and demonstrate progress in targeted product development, piloting, and partnership development. Pilots and partnerships will have significant monitoring, earning and evaluation and operational research components.  These will form the basis of a knowledge sharing, dissemination, policy, and advocacy agenda structured around online forums, working papers, and conferences. Ultimately, this initiative’s success will be measured by making marked progress towards closing the gap between the $450 billion in smallholder agricultural financing need and the current $20-$30 billion supply today.

Steering and Advisory Committee:

The sponsors of the Initiative for Smallholder Finance include the Citi Foundation, Ford Foundation, KFW Development Bank, MasterCard Foundation, Skoll Foundation, and USAID. Additionally, the Aspen Network of Development Entrepreneurs, Business Action for Africa, Business Fights Poverty, CGAP, Root Capital, and TechnoServe provide advisory support. isflogos


The Initiative for Smallholder Finance in the news:


Impact and Risk Metrics

Impact and risk metrics play an important role in efforts by investors, technical assistance providers, certification bodies, and corporations to close the $400 billion gap between demand for and supply of finance to smallholder farmers.
Visit our Impact and Risk Metrics in Smallholder Finance resource hub >>
Read the briefing, "Smallholder Impact and Risk Metrics: A Labyrinth of Opportunity" >>

Contact:

To contact the Initiative for Smallholder Finance, please email communications@globaldevincubator.org. Sign up for the Initiative for Smallholder Finance's email interest list here.