Inclusive agribusiness under climate change: a brief review of the role of finance

Abstract

Inclusive agribusiness models aim at benefitting broad layers of the farming population in developing countries, not only farmers in well-structured value chains, but also (remote) subsistence smallholders producing for local markets. Under climate change, inclusive business models also need to be made climate-smart to increase the farmers’ resilience. In this paper we provide a brief review of the role of inclusive finance as an inherent as well as synergetic component of inclusive agribusiness models. Financial institutions have difficulty in reaching out to remote smallholders, and community-based organizations often lack capacity to upscale financial services. This limits many farmers in their capability to deal with increasing climate risks. Closing this finance gap requires innovations in delivery models, and in financial products and services. Developing such adapted products requires better insight into the financial lives of smallholders, particularly under climate change, for instance from further research into climate-smart financial diaries.