Smallholder farmers are critical to meeting increasing global demand for food and pulling developing countries out of poverty. Yet only 2% of the estimated $450 billion demand for smallholder financing is met by formal institutions. 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.