Women’s financial inclusion: Alternative collateral approaches for closing the credit gap for women in agrifood systems

Abstract

Men and women engaged in agrifood systems face greater challenges in accessing financial services and securing adequate finance. Ensuring financing for small and medium-sized enterprises (SMEs) is difficult in agriculture because of external risks, including climate change, price volatility, changes in market demand, government regulations, and business-related constraints. The latter include inadequate management capacity, incomplete financial records, lack of traditional types of collateral, and extra expenses for reaching rural clients.Women involved in rural agrifood systems face even greater challenges than men in accessing financial services, due to additional social, economic, and legal constraints related to their gender. A main underlying cause of gender inequalities is related to women’s lack of the traditional collateral required to access credit, particularly as they are less likely than men to own land. The absence of property titles makes women less attractive clients for formal financial institutions and often limits their access to financing.The policy note "Women’s financial inclusion: Alternative collateral approaches for closing the credit gap for women in agrifood systems" presents examples of promising solutions to overcome the lack of collateral and facilitate women’s access to financial resources for agriculture and food system transformation. It also provides policymakers with recommendations on how to increase women’s access to financial services for building inclusive, efficient, resilient, and sustainable agrifood systems.