Overcoming investor risk perception in smallholder finance
Smallholder finance is gaining momentum, with increasing recognition of its potential to deliver both financial and social returns. But the sector is still perceived as highly risky, limiting investor interest and capital mobilization. How can we overcome this perception to unlock much-needed capital and create lasting impact for millions of smallholder farmers worldwide?
IDH Investment Management partnered with ISF Advisors to better understand the drivers of investor risk perceptions, the efficacy of risk mitigation tools, and structural barriers to investment.
Some of our key findings:
- Perceived risks often surpass actual risks, especially among investors less familiar with agriculture or emerging markets.
- Uncertainty around climate shocks or political instability can further skew risk assessments.
- Risk mitigation tools exist but are often underutilized due to perception gaps, complexity, and limited access. Better alignment, communication, and access are key.
Read the full blog with our key findings here
IDH Investment Management is an integrated investment arm that specialises in developing investable opportunities and managing high-impact funds as part of our strategy to achieve market transformation at scale. An example of this is the IDH Farmfit Fund which provides de-risking financial instruments for smallholder farmer related financing transactions, opening access to investors and catalysing commercial capital to co-invest in the sector.
Interested to know more?
Contact info@idhinvest.com