A roadmap for growth: Positioning local banks for success in smallholder finance

Published on

December 18, 2013

This briefing is the second in a series by the Initiative for Smallholder Finance. Read this note to explore what is required for a healthy, competitive smallholder banking sector, and investment opportunities for public and commercial funders seeking to support smallholders.

Local bank lending fails to meet 97% of smallholder demand for financing. To support growth for smallholder farmers, banks must lend at affordable rates, design financial products more appropriately for farmers, and improve accessibility of financial institutions to smallholders. Banks serving rural and agricultural clients could evolve in a more competitive direction marked by greater product and service innovation. In order to make strides towards closing this gap in financing, public and commercial investors can allocate capital to the banks and financial institutions that have the capabilities to grow and innovate.


This briefing’s analysis begins with an overview of the characteristics and capabilities of banks that are well positioned to serve smallholder farmers. Next, the briefing breaks banks into four archetypes, including an assessment of how effectively each archetype serves smallholders. This document also assesses each archetype on its attractiveness to public or commercial investors.

About the Author(s)

ISF Advisors
Learning Lab Strategic Partner

ISF is an advisory group committed to transforming rural economies by delivering partnerships and investment structures that promote financial inclusion for rural enterprises and smallholder farmers. Combining industry-leading research with hands-on technical expertise, ISF develops practical, profitable, and sustainable financial solutions.

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