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Strengthening the agricultural value chain, from farmer to consumer, is at the heart of feeding Africa’s rapidly growing population. A crucial component of this is providing financial access to the rural populace, the majority being smallholder farmers, to address farm productivity, poverty reduction and ultimately food security.

One initiative aimed at delivering financial inclusion in this way has been the Mastercard Foundation Fund for Rural Prosperity. This $50 million challenge fund supports a diverse portfolio of 38 for-profit businesses ranging from financial institutions, fintechs, consumer goods’ suppliers, aggregators, and other agricultural value chain players that are operating in 15 countries in Sub-Saharan Africa. This portfolio continues to create financial opportunities and empower women and youth by delivering better access to appropriate and affordable savings, credit, insurance and transaction-based products and services to their rural customers, particularly smallholder farmers.


Most recent figures indicate that since its inception in 2014, the Fund has impacted over 5 million customers in Sub-Saharan Africa. In doing so, nearly 3.4 million people have received some level of training support and capacity building to utilise over 200 financial products and services launched by the participant businesses. In addition, almost US$ 100 million more has been invested by the participants themselves into the projects, meaning that for every dollar of support by the Fund, an additional USD 2.7 has been leveraged into the sector. Over 5,700 direct jobs have also been created by participants.


But what do these impressive statistics in financial access mean for food security? Ultimately, Fund participants support smallholder farmers and rural communities by providing them a variety of financial products, inputs on credit, agricultural advice, capacity building and off-take to improve productivity as well as build resilience. Throughout the life of the Fund, participants have been developing a more in-depth understanding of the needs of smallholder farmers and offering more than just financial solutions. For example, while some participants are providing access to affordable inputs such as seeds and fertilizer, others are acting as a conduit to consumer markets and creating market linkages. 

Additionally, building more productive and resilient agricultural value chains and food systems requires the adoption of digital strategies and the leveraging of technology. Through a recent impact study, 10 out of the 12 participants in the portfolio that received additional funding through a Covid-19 recovery and resilience window adopted digital tools. These included online diaspora payment platforms, digital credit products, digitisation of field registration processes, training tools development, strengthened call centre support and more.

Developing digital products through low-cost digital platforms such as mobile banking and applying digital sourcing models that link farmers to markets such as e-commerce platforms, has reduced the cost of delivery allowing for greater reach and impact. Fund participants are also leveraging technology to enable the use of alternative data and credit scoring models, collecting satellite data, or using machine learning technology to provide customised input packages for smallholder farmers. The use of mobile phones has proven to be an effective mechanism to provide online training and disseminate valuable information relating to financial literacy, good agricultural practices, weather patterns, and even health.


The reality is that smallholder farmers remain vulnerable to climate change and shocks such as the Covid-19 pandemic, locust invasions, droughts, and floods. For Fund participants, access to customers and markets has been a challenge since the onset of the Covid-19 pandemic requiring them to adapt their business operations to continue to serve rural communities. As a result, 75% of the recipients in the Covid-19 recovery and resilience window continue to provide training and outreach activities to existing customers. A different approach to capacity building is being adopted where activities are decentralised to engage with beneficiaries in smaller groups thus including more members of the community.

This adaptive approach has allowed Fund participants to cushion smallholder farmers against calamities by providing crop insurance, subsidized inputs, flexible payment options or bundled products that allow beneficiaries greater financial freedom. 


One of the lessons learnt through the program is that cultivating strategic and collaborative partnerships across the agricultural value chain with stakeholders such as financiers, market players, government bodies and policy makers is key to sustainability. These partnerships require time to build mutual trust and value and must take a longer-term view to show results. However, when this is done well, it unlocks much greater potential to support and build the resilience of smallholder farmers.

The impact created and the lessons learnt through the Fund have demonstrated that financial inclusion is a critical factor needed to improve livelihoods. To support food security, continued investment is needed across agribusiness value chains. Additionally, embracing technology and digital finance is seen as a vital part of supporting smallholder farmers and ensuring resilient food systems to build prosperity.

Article written by Ashini Patel, Program Coordinator, Mastercard Foundation Fund for Rural Prosperity.

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