Pathways to Prosperity, a follow-up to the Rural & Agricultural Finance Learning Lab's 2016 publication Inflection Point: Unlocking growth in the era of farmer finance, presents newer data on the size and scope of the rural agricultural finance market.

Among other findings of the report:

• Despite significant progress in the sector, financial service providers are still unable to meet the full USD 240 billion demand of smallholder households for agricultural and non-agricultural finance.
• The latest data suggest that providers are currently supplying approximately USD 70 billion. This leaves around USD 170 billion (or 70 percent) of the global demand for smallholder finance unmet.
• There is a large gap in lending to agricultural small- and medium-sized enterprises (SMEs) that plays a crucial role in rural economies. In sub-Saharan Africa alone, the lending gap to agricultural SMEs is around USD 100 billion annually. 

When combined, the frameworks in this report offer a number of transformative applications. At the micro level, the rural pathways model and service provider segmentation can help determine what types of providers are best suited to serve different client segments and shed light on the elusive impact-return tradeoff. By bringing together the frameworks into a series of integrated impact-investment theses, this research hopes to drive more efficient capital allocation and smarter subsidies that can achieve particular impact and financial returns. At the macro level, the rural pathways model can also be a powerful tool for considering the current shape of a given rural economy and inform tough decisions about where and how to invest in rural transformation. 

In publishing Pathways to Prosperity, our hope is that this research will contribute to unlocking the benefits of financial inclusion for the 2.5 billion people who depend on agriculture for their livelihoods worldwide and support a new conversation about inclusive rural transformation.

Explore and download the report here.