Original Source: CGAP
The 500 million smallholder households worldwide represent a large pool of potential financial services customers. However, they are not a monolithic group. To create and provide appropriate and desirable products for the segments within this group, financial services providers, government bodies, and agricultural development partners need to understand the segments they want to serve.
CGAP research identifies three segments of smallholder households—Subsisting, Commercializing, and Diversifying—according to their crop and livestock sales, amount of agricultural land, and smallholder livelihood profile. Using data from nationally representative surveys of smallholder households in Mozambique, Uganda, Tanzania, Côte d’Ivoire, Nigeria, and Bangladesh, we estimate the market size of each segment and outline recommendations on high-value financial solutions.
This paper gives you information you can use to build your strategy to reach and serve smallholder households. For example, you’ll learn that
- The Commercializing segment is the primary market for financial solutions related to agricultural goals.
- The Diversifying segment is in transition and generally values the standard portfolio of financial services.
- To serve the more vulnerable Subsisting segment at scale, partnerships, technology, and comprehensive approaches to financial and nonfinancial services are key.
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