The percentage of smallholders withaccess to finance is equally difficult to quantify.According to estimates, even promising approaches toexpanding smallholder lending, such as value chain finance,are reaching fewer than 10 percent of smallholders,primarily those in well-established value chains dedicatedto higher value cash crops. International FinanceCorporation (IFC) has been engaged for several years inlearning efforts through diverse partnerships to obtaininsights into the challenges of agricultural finance. Theevidence of microfinance institution (MFI) involvement infinancing commercial and semi-commercial smallholdersremains anecdotal and lacks specifics on what makes MFIlending to these segments feasible, and what restricts theirreach and effectiveness. This IFC study aims to identify anddisseminate lessons emerging from the work of MFIs that haveimplemented agricultural operations targeting agriculturalsmallholders in Latin America and the Caribbean (LAC) tosupport replication and expansion of scalable approaches.Through this research, IFC seeks to understand themotivations of MFIs that venture into agricultural finance,how the products they offer have been structured, and howthey were implemented, with a specific focus on agriculturalfinance programs, and products that are designed forsmallholders in loose value chains and non-commercial(subsistence) farmers.
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