The government of Ethiopia and the UN’s International Fund for Agricultural Development (IFAD) recently launched a program with a budget of USD 306 million to support farmers that have been negatively impacted by recurrent droughts and the COVID-19 pandemic. This third phase of the Rural Financial Intermediation Programme (RUFIP 3), whose first phase was launched in 2003, is intended to “help farmers to access financial services, raise and diversify their incomes, improve nutrition and build their resilience in rural areas threatened by climate change.”
Solomon Desta, Vice Governor of the National Bank of Ethiopia, said, ”RUFIP I and II made major contributions, not just in including 5 million customers in microfinance institutions, but also in improving regulatory capacities in microfinance, banking and lease finance supervision.”
RUFIP 3 is slated to scale up the work of the first two phases by targeting women and young people to receive financial education to help them choose among financial products and services. Among these offerings will be “insurance products [developed in partnership with] rural finance institutions to allow smallholder farmers to mitigate the risks related to climate change.”
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 made loan disbursements totaling USD 630 million.
By Nathan Kiplagat, Research Associate
Sources and Additional Resources
IFAD press release
https://www.ifad.org/en/web/latest/news-detail/asset/42107314
IFAD homepage
https://www.ifad.org
IFAD Annual Report 2019
https://www.ifad.org/documents/38714170/41784870/AR2019+EN.pdf/ba495c3d-7db8-a688-08d2-1589ade15f4f
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