Members of the Council on Smallholder Agricultural Finance (CSAF) today announced that they provided $564 million in loans to 658 small and medium-sized businesses in 64 countries during 2014, an increase of 56% from 2013.

Lending growth was driven by continued geographic expansion, particularly in Africa and Latin America, diversification into new crops, and a wider range of financial products and services. CSAF members target agricultural businesses in the rural “missing middle” that typically aggregate anywhere from a few hundred up to several thousand small-scale farmers. Loans usually range from $50,000 to $2 million – too large for microfinance but generally considered too small and too risky by commercial banks.

Businesses accessing finance from CSAF members linked over 1.2 million households to formal markets by purchasing from them approximately $3 billion worth of agricultural products, from coffee, cocoa and cashews to sorghum, soy and sesame. Many of these enterprises also provided individual farmers with reliable and affordable access to credit, equipment and training to facilitate adoption of sustainable production practices in the face of climate change.

Triodos Investment Management is among the co-founders of CSAF. Michael van den Berg, Fund Manager Triodos Sustainable Trade Fund is actively involved in setting up and developing  this industry initiative: “Demand for finance among millions of smallholder farmers across the globe is still largely unmet. However, these figures show that investing in sustainable agriculture is gaining momentum. As a pioneering investor in the sustainable agriculture sector we very much welcome this development. It shows there is great potential to grow both the market for impact-first finance in emerging markets, and more importantly, the huge benefits it can bring to the farmers and their communities.’ 

Formally launched in April 2014 by seven social lenders — Alterfin, Oikocredit, Rabobank, responsAbility Investments AG, Root Capital, the Shared Interest society and Triodos Investment Management — CSAF provides a global forum for leading impact-oriented agricultural lenders to exchange learning, identify best practices and develop industry standards. In 2014, Incofin Investment Management’s Fairtrade Access fund joined CSAF as an affiliate.

CSAF’s complete 2014 lending and impact indicators are available in its recently released annual report, which was prepared by its members with research support from the Initiative for Smallholder Finance, a multi-donor effort designed to demonstrate how specific products and services can expand the reach of financing for smallholder farmers. The full report can be downloaded here .