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The Role of Microloans and Crowdfunding in Supporting Small-Scale Farmers

Nov 6, 2023

Pixabay eliasfalla Farmer - The Role of Microloans and Crowdfunding in Supporting Small-Scale Farmers

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About 98% of America’s 2 million farms are operated by families, and of these family-run farms, 90% of them are small and gross less than $350,000 annually. However, these small-scale farms account for 22% of our country’s food production. As the world population increases, these farms are playing a critical role in global food production, and agricultural experts and innovators are continually looking for ways to support them. One of the greatest needs of small-scale farms is access to funding, and out of this need, two trends have emerged that are greatly improving the livelihoods of farmers across the country: microloans and crowdfunding. This article will explore these two trends, how they work, and who they are benefitting the most.


Microloans are small, short-term loans that are given to individuals or small businesses. These loans differ from traditional loans in that they often do not require the same stringent criteria. Whereas financial institutions managing larger business loans often require a great credit history and large collateral, microloans are often more flexible, and thus more accessible for small-scale farmers.

Young farmers and those starting their businesses can greatly benefit from this accessibility, as they have not yet had a chance to build enough equity to qualify for a more traditional loan. There are certain loan programs specifically designed for the young or less-established farmer looking to break into the agricultural industry. Women and minorities are also some of the greatest beneficiaries of microloans, with the Farm Service Agency designating a portion of their loan funds for these historically underserved communities. These types of programs are ensuring that people from all different backgrounds can have an equal opportunity in their agricultural pursuits.


Crowdfunding is another approach many small-scale farmers are taking to meet their capital needs. Crowdfunding is the pooling together of funds from many individuals. With crowdfunding, you can become an investor in a small business with just a few dollars. While this may not seem like much in the long-run, small donations from many different investors can add up to make a big difference.

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Crowdfunding further serves the farmer by reducing their dependence on larger financial institutions, and instead, it strengthens the relationship between the farmer and their community. Farmers can use the power of social media to showcase their products and their vision, and their communities can become investors in that product and vision with whatever resources they have. However, not all crowdfunding campaigns are successful, and it requires some level of online literacy and community presence from the farmer. One study showed that some of the most successful crowdfunding campaigns were ones where 80% of the funds came from a farm’s already existing customer base.


Microloans and crowdfunding are among some of the great resources benefitting today’s small-scale farmers. These tools seem to particularly benefit young farmers (both in age and experience), farmers from historically underserved communities, and marketing-savvy farmers looking to utilize the power of the internet to grow their businesses. These small-scale farms are vital to our world, and various pathways to funding are essential to help ensure these farms can keep up with an ever-growing demand.

NCFA Jan 2018 resize - The Role of Microloans and Crowdfunding in Supporting Small-Scale FarmersThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit:

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