National Survey and Segmentation of Smallholder Households in Bangladesh

Bangladesh has been a global leader in financial inclusion. But are these gains reaching smallholder households? What are the constraints that hold farming families back? And where are the opportunities to better serve this diverse, important client group with the financial tools they need?

To answer these questions, CGAP conducted a nationally representative survey of smallholder households in 2016, working closely with the Bangladesh Bureau of Statistics. The survey explored the agricultural and nonagricultural activities, financial practices and interests, and challenges and aspirations of smallholder families throughout Bangladesh. 

Several key points on the financial and agricultural lives of smallholder families in Bangladesh emerge from the results:

• In Bangladesh, 45 percent of smallholders are financially included, with a mobile money, NBFI, MFI, or full-service bank account in their name. This is on par with the general population in Bangladesh, and the financial ecosystem continues to grow. A majority of smallholder families have a mobile phone. They put money aside and tend to be active users of their financial accounts (i.e., use at least once within 90 days), and they want new services like goal-oriented savings plans. 
• There are sustainable, prosperous smallholder households in Bangladesh that could play an important role as resources and in peer-to-peer networks for other agricultural families. This segment of the smallholder sector can also make the business case for financial solutions related to agriculture. Smallholders get agricultural information through a range of channels—television, suppliers, community members, and government officials—that could also deliver meaningful, useful financial information. 
• Most older smallholders are committed to farming and want information and tools to plan their agricultural and financial lives. This could include guidance on good agricultural practices, strategic decisions about land use, and mechanisms that facilitate planning and safety nets to maintain their livelihood in the face of unexpected shocks. Smallholders do not have to be convinced to plan, save, or invest in their future, but do not yet see relevant solutions from financial services providers.
• The commitment to agriculture is weaker among the youngest smallholders. Young people bring unique potential to smallholder farming. They are often better equipped with basic skills and tools than older farmers and are more comfortable using technology to inform and advance their agricultural activities. New farmers may need expanded opportunities and support to persevere in agriculture, some of which could leverage low-cost technology to deliver.
• There are opportunities to reach financially excluded smallholders. Many lower-income, more vulnerable smallholders have the necessary identification to open a financial account and most have access to a mobile phone. They are familiar with mobile money and predisposed to save, but providers have yet to fully understand their needs and offer them relevant solutions. 

This working paper provides more detail on these points and profiles the four main segments of smallholder households in Bangladesh. These results are designed to identify opportunities for financial services providers, government partners, and donors to better meet the needs of smallholder families for a range of financial tools.