Evidence on the effectiveness of Market Systems Development (MSD) programs for extremely poor smallholder farmers during shocks or stressors is limited. This study explores the role of the inclusive MSD (iMSD) approach in generating resilience and presents empirical findings from World Vision’s project areas in Tanzania and Rwanda. The panel data collected between 2017 and 2021 show that households involved in iMSD activities had significantly greater food security, market participation, and recovery perceptions compared to comparison households during the COVID-19 shock. In Tanzania, food insecurity improved, while in Rwanda, it worsened, especially among comparison households. The differing impacts can be attributed to stricter lockdowns and limited iMSD activities in Rwanda.