The government of Malawi and the UN’s International Fund for Agricultural Development (IFAD) recently agreed to launch the Financial Access for Rural Markets, Smallholders and Enterprise (FARMSE) Programme, whose primary objective is to address poverty in Malawi by boosting rural households’ financial literacy and access to financial resources. The initiative’s total cost of USD 58 million includes a loan and a grant from IFAD, each amounting to USD 21 million; USD 10 million from the government of Malawi; and USD 6 million from an undisclosed group of “local private sector participants.”
The project consists of four components: (1) USD 34 million for grants and technical assistance to 641 “village savings and loans associations (VSLAs)”; (2) USD 16 million to address rural households’ food security and household budgeting through grants of approximately USD 70 per household, classroom training and weekly at-home mentoring; (3) USD 2 million for research support for VSLAs and financial literacy training for rural households; and (4) USD 6 million for administration. The goal is to serve 433,000 people “of which, an estimated 30 percent will be women, and at least 20 percent will be youth.”
Established in 1977, IFAD is an agency of the UN governed by 176 member nations and dedicated to eradicating rural poverty in developing countries. The organization provides grants and loans to households as well as small and medium-sized enterprises (SMEs) with a focus on agricultural and food supply issues. IFAD disbursed new commitments of USD 823 million during 2016, including loan disbursements of USD 633 million, bringing its portfolio of ongoing projects to approximately USD 10 billion. As of December 2016, it had 211 projects active in approximately 100 countries.
By Nicholas Galimberti, Research Associate
Sources and Additional Resources
IFAD press release
https://www.ifad.org/web/latest/news-detail/asset/40316844
FARMSE project detail
https://operations.ifad.org/documents/654016/f7452598-17ab-4ca8-be10-16518aa91131
IFAD annual report
https://www.ifad.org/documents/38714170/39309732/AR2016.pdf/1f1a0e1e-6ebb-4480-a321-1da169f46198
MicroCapital Brief; June 27, 2017; IFAD, Cambodian Government, Private Sector Investing $60m in Microfinance, Infrastructure Program to Help 15k Farming Families Expand Operations
https://www.microcapital.org/microcapital-brief-ifad-cambodian-government-private-sector-investing-60m-microfinance-infrastructure-program-help-15k-farming-families-expand-operations/
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