Leading global and African financial experts have issued a resounding call to align financial structures with the needs of smallholder farmers.

Speaking at a two-day conference on financing Africa’s smallholder farmers in Nairobi, Kenya, the experts underscored the crucial role of government intervention in creating an enabling environment for financial institutions to expand agricultural lending.

The conference represents a pivotal step in mobilizing the billions needed annually to support Africa’s smallholder farmers, who make up some 80% of the continent’s farming population but control less than 5% of agricultural land.

African Development Bank Group President Dr. Akinwumi Adesina delivered the keynote address, highlighting a glaring disconnect: while agriculture contributes 30% to Africa’s GDP, it accounts for only 6% of commercial bank lending.

“Smallholder farmers around the world are the same, except those from Africa face difficult odds — poor access to markets, finance, information, infrastructure, and inputs—none of which we can’t address collectively,” Adesina said.

A key highlight of Tuesday’s session was a panel discussion featuring Alice Albright, former CEO of the Millennium Challenge Corporation (MCC); Brian Milder, Founder and CEO of Aceli Africa; and Jules Ngankam, Group CEO of the African Guarantee Fund. Moderated by former international broadcaster Yvonne Ndege, the panel explored practical designs for sustainable financing mechanisms to bridge the financing gap in agriculture.

Panelists identified several critical barriers to adequate financing. These include risk misperceptions in agricultural lending, high transaction costs for rural financial services, mismatches between standard loan products and agricultural business cycles, lack of formal financial records and collateral, and inequitable value chain structures that limit farmer profitability.

Milder shared a success story from Tanzania, where targeted interventions enabled Tanzania Commercial Bank to increase its agricultural lending share from 2% to much higher levels while simultaneously quadrupling rural bank deposits.

He also highlighted the stark contrast between the 14% yield on Kenyan government bonds and the mere 3% average return on agricultural SME lending, illustrating the urgent need for solutions that make agricultural finance more attractive to investors.

“Capital is like water—it runs downhill,” Milder noted. “We need solutions that consider the full profitability equation, including transaction costs, risk, and capital costs for financial intermediaries.”

Albright drew on her experience developing the International Finance Facility for Immunization, which has raised $9.7 billion, to emphasize the need to clearly define financing challenges, assess risks, and build political will among governments.

“We must articulate the public policy rationale for financing smallholder farmers and address key design challenges, including risk management and cost efficiency,” Albright stated. “With political will, innovative financial instruments, and strategic partnerships, we can establish a robust financing ecosystem that ensures capital flows where it is needed most.”

Ngankam provided insights into how risk mitigation strategies could unlock financing for smallholder farmers. He emphasized the necessity of financial products tailored to different agricultural value chains.

“The repayment schedule for maize cannot be the same as for tea or coffee,” he explained. “Commercial banks need specialized products that align with agricultural business cycles.”

Panelists proposed several strategic recommendations to enhance agricultural financing, including tailoring financing approaches separately for working capital and infrastructure investment, developing risk-sharing mechanisms to attract greater participation from commercial banks, and strengthening digital financial infrastructure to lower transaction costs.

They also emphasized the need for targeted subsidies to stimulate private capital investment and called for enhanced market access to help farmers capture more value from agricultural production.