Small-scale farmers, large-scale exclusion
Across the developing world, hundreds of millions of small-scale farmers feed entire nations — yet they remain among the most financially underserved groups on earth. They face a structural paradox: they need access to credit, insurance, and financial services to grow their crops and manage risks, but the financial system largely passes them by. Commercial banks consider them too risky or too costly to serve. Microfinance institutions try to reach them, but often struggle to do so affordably and at scale. The result is a persistent financing gap that limits agricultural productivity, perpetuates rural poverty, and weakens food systems around the world.
Two institutions, one shared mission: IFE-FST Initiative
To address this challenge, the International Fund for Agricultural Development (IFAD) — a United Nations agency that finances projects combating hunger and rural poverty — funded the Inclusive Financial Ecosystem for Food Systems Transformation (IFE-FST) initiative. The initiative is implemented by Rabo Partnerships, a dedicated part of Rabobank focused on strengthening food- and financial systems in emerging markets. Structured into four sequential phases — inception, solution design, execution, and dissemination — the initiative unfolds over a two-year period with the ultimate goal of catalysing inclusive, resilient, and sustainable food systems by unlocking finance for small-scale farmers.
The initiative concentrates on two regions: Latin America and the Caribbean (LAC) and Asia and the Pacific (APR). Within these regions, the program engaged National Development Banks (NDBs) across nine countries — BDP in Bolivia, FINAGRO in Colombia, BanEcuador in Ecuador, and FIRA in Mexico in LAC, and NABARD in India, NBP in Pakistan, PKSF in Bangladesh, Agribank in Vietnam, and LBP in the Philippines in APR. NDBs are state-backed financial institutions whose mandate is not profit but public policy, making them uniquely positioned to offer longer-term, lower-cost financing to segments of the population that face challenges in accessing finance from other types of financial institutions. Three countries per region were then selected for deeper engagement in the solution design phase.
From diagnosis to solutions
The initiative has unfolded in structured phases, each producing a key report.
The Inception Report established the foundation. It analysed how NDBs across the nine focus countries currently operate — what financial products they offer, how they reach farmers, and what institutional constraints hold them back. It also examined what other financial actors, including commercial banks, cooperatives, and microfinance institutions, contribute to agricultural finance and how NDBs can complement and support them in closing the gap. Crucially, the inception phase looked beyond the focus countries to identify global best practices: examples from Brazil, India, Mexico, Bangladesh, and the Netherlands that demonstrate what is possible when the right financial tools are combined with the right delivery models.
The Solution Design Report built directly on those foundations, moving from analysis to decision tools. Rather than creating new financial products from scratch, it developed a practical toolkit for NDBs — a structured playbook that guides them from diagnosing a farmer’s challenge to selecting and deploying the most suitable instrument. To ensure practical feasibility, the Rabo Partnerships team conducted country visits across six nations, engaging directly with NDBs, government ministries, and farmer organisations, complemented by extensive desk research into global best practices. The toolkit covers a wide variety of instruments that are categorised as follows.
- Financial instruments, including various types of concessional loans, credit guarantees for financial intermediaries, and insurance.
- Non-financial instruments, including digital financial services and channels, and technical assistance & capacity building.
For all instruments, enabling factors such as product characteristics, process, distribution channels and -strategies, policy, and regulation are described. In addition, a potential role for Multilateral Development Banks (MDBs) and public institutions is suggested, as well as risk management and funding needs and options. A specific section is dedicated to measuring effectiveness of instruments.
A key insight from this phase is that no single instrument is sufficient; integrated combinations of financial and non-financial support, increasingly delivered through digital channels, are what produce lasting impact.
Webinar – United to unlock inclusive finance
Building on this work, the program hosted a webinar, United to Unlock Inclusive Finance, which served as a platform to share lessons from the program, discuss global trends and developments among NDBs, and showcase best practices from five NDBs across Latin America and Asia. Watch the event recording here.
Documentations
About Rabo Partnerships and Rabobank
Rabobank is an international cooperative bank with Dutch roots, founded in 1898 — a bank without shareholders, but with members, built on the principle of working together rather than standing alone. From the 1980s onward, Rabobank expanded internationally in pursuit of its mission to finance global agriculture, establishing operations across Europe, Asia, Australia, and the Americas through a combination of new branches and strategic acquisitions. Today, Rabobank serves over 9 million customers in 34 countries, with 48,000 employees worldwide. Globally, it works with entrepreneurs and businesses across key sectors, with a particular focus on food and agriculture, as well as energy, mobility, and healthcare. Headquartered in the Netherlands, Rabobank is today one of the world’s leading providers of financial services to the agricultural and food industry, and one of the largest financial institutions globally. Rabo Partnerships is a dedicated arm through which Rabobank translates this expertise into emerging markets, working with local partners including financial institutions, agricultural value chain actors, multilateral organisations, government actors, and donors. Through this, Rabobank and Rabo Partnerships aim to enhance agricultural finance and therewith food- and financial system transition.
