Ethiopia, IFAD launch over $305m programme to help farmers increase resilience
Addis Ababa, October 6, 2020 (FBC) -Ethiopia and the International Fund for Agricultural Development (IFAD) have launched a new $305.7 million programme to help the most vulnerable farmers increase their resilience.
Implemented by the Development Bank of Ethiopia, the third phase of the Rural Financial Intermediation Programme (RUFIP III) will help farmers to access financial services, raise and diversify their incomes, improve nutrition and build their resilience in rural areas threatened by climate change.
The virtual launch involved project participants, government officials, United Nations (UN) and IFAD staff, according to a press release issued by IFAD.
The funding includes a $35.1 million grant and $4.9 million loan from IFAD, with significant cofinancing from international development partners and from national financial institutions.
The Government of Ethiopia’s contribution is $51.9 million and $0.9million from the beneficiaries themselves, he release indicated.
”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,” said Solomon Desta, Vice Governor of the National Bank of Ethiopia. ”
RUFIP showed that microfinance is a better strategy for financial inclusion of the vulnerable poor – by comparison there are 5 million microfinance institution borrowers as against only 0.3 million in banks.”
RUFIP III will build on the lessons and experiences of the first two phases of the programme, and will scale up delivery of rural financial services tailored to the needs of the most vulnerable smallholder farmers, particularly women and young people.
“IFAD is a key United Nations agency in Ethiopia, having made more than US$750 million of investments so far and reaching 7 million vulnerable households. RUFIP III is also part of the UN response to COVID-19, helping to support smallholder farmers in accessing rural financial services,” said Catherine Sozi, United Nations Resident Coordinator to Ethiopia.
Ulaç Demirag, IFAD Country Director for Ethiopia said “RUFIP III is really about people — it is not to simply make credit available to the rural population, to strengthen the microfinance sector in Ethiopia and to promote agro-industrialization, but to bring 13.5 million vulnerable rural households on a sustainable path to prosperity.”
Since 1980, IFAD has invested $795.5 million in 20 rural development programmes and projects in Ethiopia worth a total of $2.1 billion. These have directly benefited around 12 million rural households.