Financial Innovation for Smallholder Families

There are an estimated 500 million smallholder families — representing 2 billion people — around the world. These households rely to various degrees on agricultural production for their livelihoods, but they are also entrepreneurs, tailors, merchants, consumers, and more. For financial services providers, they represent the largest client segment by livelihood living on less than $2 a day. CGAP’s work with smallholders focuses on better understanding smallholders’ needs and aspirations and working with financial services providers and policy makers to meet them.

Understanding Demand

The first step toward reaching smallholder families is to better understand their needs, preferences, aspirations, and behaviors. CGAP has engaged thousands of small-scale farmers around the world through nationally representative surveys and financial diaries to learn how financial services can better meet their needs.

National surveys. CGAP conducted nationally representative surveys of smallholder households in six countries. The data shows the diversity of the sector, covering smallholders’ agricultural and non-agricultural incomes, financial behaviors and tools, mobile phone usage, and perceptions of their agricultural and financial lives. CGAP is currently developing an online data hub, featuring easy-to-use, interactive data visualizations, that will put more than 500,000 data points from the surveys at financial service providers' fingertips.

Financial diaries. Financial diaries in three communities complement the quantitative data from our surveys, offering a unique window into smallholders’ financial lives and money management approaches. The diaries track all cash flows for roughly 100 households per community for a year.

Driving Innovation

CGAP is currently working with many types of financial service providers across the globe to translate our demand-side insights about smallholders into market impact. We are exploring ways digital innovations can break down barriers to serving the segment by tailoring savings, credit, payments and insurance products. Digital technology can also help foster collaborations among service providers in the financial, agricultural, FinTech and telecom sectors that favor sustainability and allow smallholders access to a wider set of financial and non-financial services.

Some of our recent and ongoing collaborations to drive innovation for smallholders include:

Enabling smallholder resilience in Nigeria. We are applying satellite technology to reduce the cost of delivering agricultural insurance to smallholders. The insurance product protects purchases of agricultural inputs like seeds and fertilizer and prevents default on loans in case of a natural shock. It is delivered along with loans and agronomic advisory support.

Digitizing agricultural payments in Uganda. Working with UNCDF, CGAP explored the cost implications of cash and mobile money in the coffee value chain as basis for strengthening the digital payments value proposition for smallholders. Because cash leaves no trace, the transition to mobile money creates a digital footprint, enabling financial service providers to leverage payments and other data points to design financial services for smallholders.

Empowering agents to better serve smallholder customers. In Senegal, CGAP supported an innovative pilot that leverages smartphone technology to convert myAgro’s network of third-party agents from passive points of sale into more engaged participants in the company’s mission to improve farmer livelihoods.


23 October 2017
This survey explored the agricultural and nonagricultural activities, financial practices and interests, and challenges and aspirations of over 3,300 smallholder families throughout Nigeria.
Download PDF: 
English (93 pages)
24 July 2017
Côte d’Ivoire is the largest producer and exporter of cocoa beans and cashew nuts, and a top exporter of coffee and palm oil. Nevertheless, Ivorian smallholder farmers who contribute the most to the agricultural sector are largely neglected by formal financial institutions.
Download PDF: 
English (114 pages) | French (126 pages)

From Our Blog

Smallholder in Uganda receives cash payment
16 October 2017
From hurling sacks of money out of planes to transporting cash in armored cars, the methods used to pay farmers in Uganda can be unsafe and inefficient. So why haven't digital payments taken off?
Map of innovation proposals from Africa
13 September 2017
CGAP received nearly 200 proposals from digital financial services providers across Africa interested in piloting new products. A look at those proposals — from 30 countries — shows that innovations are spreading beyond hot spots like Kenya.