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The last decade has seen increasing recognition by policymakers, capital providers, and finance practitioners of the vital role played by agricultural small- and medium-sized enterprises (agri-SMEs) in agriculture and food systems in developing countries, as well as their key challenge of limited access to finance.

In sub-Saharan Africa and Southeast Asia, there is an estimated USD 160 billion demand for financing by ~220,000 agri-SMEs. However, we estimate that only USD 54 billion (~34%) is currently being met through formal finance channels—leaving an annual financing gap of USD 106 billion.

These headline estimates are large, but reflect in numbers what most practitioners have experienced through working with agri-SMEs. Digging beyond numbers, our new State of the Sector report with CASA introduces a more specific view of where the market for agri-SME finance is (and isn’t) clearing.

To add new perspective, this report breaks down the market in a more comprehensive and holistic way to show where finance is specifically flowing, via specific types of products from specific types of funders to specific types of agri-SMEs. The report also presents four long-term change priorities that we see as crucial to systematically closing the USD 106 billion agri-SME financing gap over time.

Related Research

A Dynamic Approach to Understanding Demand in Agri-SME Finance

A summary of our new characterization of agri-SMEs based on their growth pathways and their role in food systems. With this understanding, policymakers and practitioners can better define agri-SMEs and their finance needs.

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The Current State of the Agri-SME Finance Sector

A summary of important new insights shared in our latest State of the Sector report, including new market sizing estimates across regions and a comparative analysis of existing agri-SME financing channels.

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State of the Sector: Agri-Insurance for Smallholder Farmers

A follow up to our 2018 Protecting Growing Prosperity report, we take stock of the current state of agri-insurance for smallholder households. We also introduce new ways of thinking about the sector through deep dives, and propose a set of priority areas to guide work over the next 5 years.

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