MICROCAPITAL BRIEF: AFD Loans $356m to IFAD to Assist Rural Farmers in Developing Sustainable Agriculture, Accessing Microfinance, Fighting Hunger, Responding to Climate Change, Enduring COVID-19 Pandemic

Agence Française de Développement (AFD), the overseas development agency of the French government, recently loaned EUR 300 million (USD 356 million) to the UN’s International Fund for Agricultural Development (IFAD) to assist small-scale rural farmers in developing nations. The funds are intended for managing natural resources, introducing sustainable agriculture practices and increasing access to financial services. This commitment is a response to both climate change and the COVID-19 pandemic having amplified the number of rural farmers living in poverty. According to the annual UN survey “State of Food Security and Nutrition in the World,” approximately 690 million people experienced hunger in 2019, and this number is expected to rise by 135 million by the end of 2020.

“If we want a world without hunger and poverty, we have to focus our attention on the most vulnerable places where the poorest people live – and this is in rural areas,” said IFAD President Gilbert F Houngbo.

Established in 1941, AFD is a bilateral development finance institution that implements the overseas development assistance policies of the French government. It operates in 109 countries and is financing approximately 3,500 development projects as of 2020. AFD is a member of the AFD Group, whose other member is Promotion et Participation pour la Coopération Économique (PROPARCO), which focuses on the private sector. In 2019, AFD Group reached total commitments of EUR 11.4 billion (USD 12.8 billion), including EUR 1.6 billion (USD 1.8 billion) signed by PROPARCO.

Established in 1977, IFAD is governed by its 176 member nations with the goal of eradicating rural poverty in developing countries. With a focus on agriculture and food supplies, the organization provides grants and loans to research organizations, governments, private firms and civil society organizations. As of year-end 2019, IFAD had USD 9 billion in assets. During that year, it disbursed loans totaling USD 630 million and grant financing totaling USD 279 million.

By Kate Finster, Research Associate

Sources and Additional Resources

IFAD press release
https://www.ifad.org/en/web/latest/news-detail/asset/42160024

IFAD 2019 annual report
https://www.ifad.org/en/web/knowledge/publication/asset/41990757

AFD website
https://www.afd.fr/

UN “State of Food Security and Nutrition in the World” 2020 survey
http://www.fao.org/documents/card/en/c/ca9692en

Previous MicroCapital article on AFD
https://www.microcapital.org/microcapital-brief-agence-francaise-de-developpement-afd-loans-13-6m-to-nampost-for-microfinance-lending-to-pensioners-in-namibia/

Previous MicroCapital article on IFAD
https://www.microcapital.org/microcapital-brief-ethiopia-ifad-focus-3rd-phase-of-rural-financial-intermediation-programme-rufip-on-supporting-farmers-through-climate-change-covid-19-pandemic/

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