Smallholder Farmers are Financially Excluded While competition and market development has increased access to financial services for many, rural smallholder families in Sub-Saharan Africa remain among the most financially excluded households in the world. Expanding access to appropriate financial services is a key requirement in helping smallholder families to manage their daily risks and improve their well-being. Most smallholder families could earn more if they could grow more, and they could grow more with a combination of the right skills and better agricultural equipment, seeds and fertilizer as well as a more developed and organized marketplace.
There are many challenges to expanding access to financial and other asset-building services for smallholder families. First, there is the physical distance between many smallholders and financial service providers (FSPs) and markets, making it difficult to reach them in a costeffective manner. Second, many of these farmers have limited or no interactions with financial institutions; therefore, they can be hesitant or unable to seize opportunities that might be available to them through greater financial inclusion. Farm families have complex financial lives. Analyses of financial diaries have shown that these families are compelled to make decisions about how to appropriately allocate scarce resources to meet competing demands, such as how much of their crop they should sell and how to acquire additional nonagricultural sources of income. Third, many smallholder farmers are not linked to a cooperative or group that could help to facilitate access to financial services.