Two billion adults in the world are excluded from credit. The situation is especially bad for small farmers in rural areas who are unable to access loans to invest in their farms, trapped in a vicious circle of low productivity, low yields, and poor income.
The Initiative for Smallholder Finance estimates that smallholders globally access just $50 billion of the $200 billion of lending that they require to grow their operations and improve their lives. The global growth of microfinance banks has created new opportunities for financial inclusion, with outstanding lending of $100 billion to around 200 million clients. Yet the majority of lending from microfinance institutions has been to urban populations and not to the rural poor or small farmers.
Author: Roy Parizat and Heinz-Wilhelm Strubenhoff