Access to affordable credit remains one of the most pressing challenges for smallholder farmers in emerging economies, where agricultural production underpins livelihoods and broader economic growth. Traditional credit channels often exclude smallholders due to high transaction costs, lack of collateral, and limited financial literacy, resulting in persistent productivity gaps and vulnerability to poverty cycles. Recent advances in digital microfinance innovations ranging from mobile-based lending platforms to blockchain-enabled credit scoring and AI-powered risk assessment have created new pathways to expand financial inclusion. By lowering entry barriers and improving transparency, these technologies can connect underserved smallholders to formal financial systems, enabling investment in farm inputs, mechanization, and diversification. Beyond agriculture, access to tailored microfinance services can spur entrepreneurship, strengthen supply chains, and foster cross-sectoral linkages that contribute to sustainable development. However, critical challenges remain, including the digital divide, algorithmic bias, and inadequate regulatory frameworks that may reinforce rather than alleviate exclusion. This article evaluates the evolving landscape of smallholder credit access within the context of digital microfinance innovations. It explores how financial inclusion directly impacts productivity growth, poverty alleviation, and development across interconnected sectors such as agribusiness, energy, and education. By synthesizing evidence from recent initiatives, the analysis highlights both the transformative potential and systemic risks of deploying digital microfinance at scale. Ultimately, effective integration of digital solutions requires balanced governance, investment in digital literacy, and partnerships between governments, private investors, and development organizations to ensure that smallholder empowerment translates into inclusive and sustainable economic progress.