The livestock sector in Bangladesh is a critical component of the economy, contributing approximately 1.8% to GDP and providing employment for around 20% of the population. It plays a vital role in ensuring food security and nutrition by supplying essential animal protein. However, many livestock farmers, particularly smallholders, face significant barriers to accessing finance. The informal nature of their operations and their classification as small and medium enterprises (SMEs) with limited capital hinder their financial opportunities.
A study by LightCastle Partners reveals that 93% of livestock farmers operate at the smallholder level, often with few animals, which makes them particularly vulnerable to financial instability. This vulnerability is further exacerbated by climate change and environmental shocks, such as floods, that can lead to substantial losses due to a lack of suitable insurance products.