Role of Islamic Microfinance in Achieving SDGs Through Smallholder Financing: Case of the Gambia

Rising food insecurity and poverty poses a threat to the development of The Gambia. The agriculture sector employs a large segment of the country's labor force. The growth of the sector forms part of the country's strategy for enhancing food security and poverty alleviation in line with the 2030 agenda for sustainable development. However, the sector's performance is undermined by numerous factors, among which are low investments due to limited fiscal space occasion by competition among critical sectors of the economy coupled with low private sector investment, which has left a huge funding gap in the sector. The purpose of this study is to investigate the constraints that hamper agriculture productivity with the view of proposing an Islamic financing mechanism to boost the productivity of the agriculture value chain actors, especially the smallholders. Using a mixed-method approach, the study employed convenience sampling to survey 207 smallholder farmers in four farming communities in the western region of The Gambia. To ascertain the constraints they encounter in their farming activities, their sources of funding, and the impact of finance on the productivity of the farmers who were availed commercial credit, among others. The findings of the study revealed that smallholders' grapples with numerous challenges, prominent of which is the lack of access to low-cost funding. Furthermore, it has been ascertained that farmers who were availed commercial credit were able to intensify their production which results in high yields, income, access to market and improved consumption. Recommendations were made to the effect that; the regulators and policymakers of The Gambia should devise Islamic microfinance regulatory framework to enhance financial inclusion and inclusive growth. The study also recommend for the collaboration between Islamic banks and Islamic institutions of compassion in devising solutions to cater to the financial and non-financial needs of the smallholders to address the issue of food insecurity and poverty.