Smallholder farmers, regardless of crop type, face financial challenges constantly due to the many demands on their modest cash reserves. In addition to farming expenses, pressure comes from multiple aspects of their lives: their children’s education, home maintenance, medical bills, etc.
Without proper planning that takes into account all incoming and outgoing flows, and the timing, farmers can find themselves unable to meet critical commitments. This can cause a reliance on short-term solutions from dealer finance or other non-traditional financiers, given that the farmers lack credit profiles for formal bank finance.
They may not fully understand important details of a loan product, including the effective interest rates, because of low financial literacy. These types of finance options in turn impact the farmers’ livelihood. In recent years, FinTech solutions like iAPPS and crowdfunding solutions have emerged to provide further options for smallholder farmers to access finance.
How might we enable smallholder farmers to better plan and manage their cash flow, understand and evaluate the impact of decisions around the sources and uses of their funds, and ultimately act on these choices to achieve better and sustainable financial outcomes for their farming operation and family?
How might we enable smallholder farmers to access more formal and affordable financing through positive transformation of the role that existing intermediaries play?