Tools and guidelines

Recent advances in technology and telecommunications have the potential to make financial services more accessible and affordable for smallholder households in rural areas. With digital platforms such as mobile phones, smallholders can now use financial services without having to visit a bank branch. 

This HTDN provides guidance for project design teams on how to design a 4P component and how to support the implementation of 4Ps within IFAD-funded projects.

It builds on findings and lessons learned from previous IFAD-supported projects, as summarized in the 2013 report, IFAD and Public-Private Partnerships: Selected Project Experiences, and the Institute of Development Studies (IDS)/IFAD publication, Brokering Development: Enabling Factors for Public-Private-Producer Partnerships in Agricultural Value Chains.

This HTDN begins by defining the 4P and related concepts and then analyses the basic elements that need to be considered when designing and establishing a 4P followed by recommendations for the implementation of 4Ps.

Advances in digital technology and telecommunications are presenting new financial inclusion opportunities for smallholder farmers in rural areas.1 A growing number of payments, savings, credit and insurance products can be delivered digitally to address the financial needs of smallholder households. Smallholders
can especially benefit from mobile phone platforms, which offer immediate, safe access to government subsidies, cash transfers and remittances. The messaging features of mobile phones can complement digital financial services (DFSs) by offering timely information on weather conditions, farming tips, market
prices and potential buyers, which can help increase farming yields and profitability.

Recent advances in technology and increasing penetration of telecommunication systems into rural areas have the potential to make financial services more accessible to smallholder households. Mobile telephony and data networks, coupled with agent networks, can enable the use of digital payments and savings and
provide a platform for credit and insurance, without smallholders having to visit a bank branch. Mobile phones can also bridge information asymmetries by offering weather forecasts and real-time market prices, which can improve the ability of farmers to prepare and respond to inclement weather and price fluctuations.