Call to Action

While moving from a static to a dynamic view of rural clients seems subtle, we believe it will be transformative for all actors involved in rural financial service delivery. The rural pathways model opens up the possibility for vitally important conversations between relevant national governments and the myriad of funders, service providers, and civil society actors involved in supporting inclusive rural transformation. The rural pathways model also changes the way we, as a sector, conceive of service provision. With this understanding should come appropriate changes in how service providers tailor products, bundle offerings, and communicate with their clients.

For many years, subsidy has been used to support rural service provision without the frameworks or data to systematically decide where it is needed and how it should be applied. The client and service delivery model distinctions introduced in this report—combined with a more sophisticated mapping of outcomes and profitability profiles—can support a new conversation around “smart subsidy.”

As described in this report, we believe that capital providers of all types will better match their subsidy to service providers as different asset classes are made clearer and more transparent. This will involve efforts to build out many of the concepts and frameworks introduced in this report. But we believe that, as standards and benchmarks are established, scarce subsidy will begin to be applied in smarter, more efficient and high-impact ways.

The use of digital technologies is dramatically changing the landscape of service provision for rural agricultural finance. However, early experimentation must evolve into proven, scalable solutions. This transition requires another stage and type of investment, by both service and capital providers, to ensure that early innovations don’t stall.

Though the number and diversity of capital providers for rural agricultural finance has exploded over the last decade, the capital needed to close the gap on service provision is still far more than what can be provided through traditional channels. As innovation in service provision creates more viable service delivery models, the capital market will need to respond in lockstep. This requires more effective connections between capital need and right-fit capital supply, as well as advances in the structures used to deploy capital.