Creating wealth in smallholders farms through efficient credit systems in Pakistan

close-up of a brown cow in a pasture with cows in the background
Project code
AUD 199,710
Project leader
John Steen - University of Queensland
Commissioned organisation
The University of Queensland
JAN 2017
NOV 2018
Project status
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The project aimed to investigate credit markets and schemes that promote entrepreneurial opportunities for Pakistani smallholders, especially women. Understanding the barriers and success factors in these two areas has enabled more effective development schemes.

This study explored how giving farmers, particularly women, access to credit and entrepreneurial opportunities can help smallholders to improve agricultural productivity and reduce poverty.

The project examined the efficiency of financial lending practices in the agricultural sector and determined the best lending practices which could improve smallholder farmers productivity and profitability. Institutional factors inhibit smallholders access to credit facilities. Some studies focus on informal sector lending such as commission agents, but no study empirically compares financing schemes in the smallholders horticultural sector. This makes it necessary to estimate the cost effectiveness of financing sources for smallholders.

Examining these financing sources could enable analysis of the financial viability of existing loan schemes at farm level and relate them to farm productivity and profitability. This will help policy makers to design financing schemes for smallholders.


This project investigated two proven levers of smallholders’ wealth creation in Pakistan in the form of more efficient credit markets and schemes that promote entrepreneurial opportunities for women. Understanding the success factors and barriers to effectiveness in these two areas is important to design more effective financing schemes and policies.

This study aimed to:

  • Provide an informed summary of credit access issues of small farmers
  • Explore smallholders’ credit constraints
  •  Identify the research and development priorities
  •  Recommend strategies and actions that can help smallholders

A key finding from the research was that productivity on farms in most rural areas is low. Improving productivity requires modernizing farming methods, but the effectiveness of government development programs to do so depends on farmers accessing finance to make these changes possible.

Key partners
Pakistan Agricultural Research Council
Shah Abdul Latif University
University of Agriculture Faisalabad
University of Sindh