The Food and Agriculture Organization of the United Nations (FAO) and the International Fund for Agricultural Development has signed an agreement to promote smallholder finance in order to boost agricultural production in developing countries.
The deal includes a US$875,000 grant released to help small farmers and rural households in developing countries gain better access to finances, which will allow them to make business investments.
According to the organisations, the grant agreement is intended to generate new policy tools and training materials. The money will be aimed at generating materials for public sector agencies, donors, financial institutions and non-governmental organisations (NGOs) working to help smallholders access financial services.
The grant was finalised last Friday (8 February) during the annual meeting of the Improving Capacity Building in Rural Finance (CABFIN) partnership.
Senior FAO agribusiness and finance office Calvin Miller said: “Many development agencies said finance for agriculture was too risky and difficult. The CABFIN Partners believed otherwise and, 10 years ago, initiated a plan to jointly address learning on polices, products and models by sharing information on how it can be done, by creating the RFLC information gateway and by jointly developing technical guidance documents and working together on strategic initiatives in the sector. The continued and growing commitment of the partners is testament to the global success and impact from the collaboration.”
Michael Hamp, IFAD senior technical aviser, rural finance, explained it was a “real model of coordination, cooperation and harmonisation” for rural finance and agricultural investment. He added: “It not only promotes sharing information among local public and private partners, it supports an environment of knowledge-sharing and dialogue across regions.”