Out of the two billion people globally who are financially excluded, one-in-four work in agriculture. And while more than 70% of people living in poverty around the world are farmers, financial providers are only meeting 3% of their demand for financial services.
Access to tailored & affordable financial services is key to develop any business – and small-scale farms are no exception. Inclusive finance is therefore key to help secure financial resources and develop small-scale farms. It includes access to micro-credit, microinsurance & generally financial services.
The challenge for banks or microfinance institutions is that when it comes to the poorest farmers, administering risk mitigation instruments such as weather-related insurance for crops is expensive when the premiums are so low and the cost of assessing the value of individual losses and incidences of fraud is so high. Yet the poorest farmers are also those in greatest need of risk management tools.
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