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Understanding Demand, Driving Innovation: Smallholder Households and Financial Services

This paper from CGAP serves as background for the Smallholder Diaries and national surveys of the smallholder sector. It highlights the prevalence of smallholders among the world’s poor, and the substantial reliance on agriculture in low-income countries, hence the importance of increased productivity of small farms. The paper also reviews the many factors that influence rural poverty and the wellbeing of smallholder households, and their connection with demand for financial tools of various kinds. The shortcomings of rural financial markets to serve smallholders over time are examined along with the promise of digital financial services, and other innovative mechanisms, to expedite the alleviation of those limitations.

CGAP
CGAP is a global partnership of more than 30 leading development organizations that works to advance the lives of poor people through financial inclusion. Using action-oriented research, we test, learn and share knowledge intended to help build inclusive and responsible financial systems that move people out of poverty, protect their economic gains and advance broader development goals. We research and experiment to achieve proof of concept and extract lessons that can be built to scale by our partners, who apply our insights in the marketplace.

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