The International Fund for Agriculture and Development (IFAD), an agency of the United Nations, recently announced a USD 90 million loan to the Tanzanian government to strengthen access to finance in rural areas and to promote private sector development through its “Marketing Infrastructure, Value Addition and Rural Finance Support Program”. The loan agreement was signed in Rome by Kanayo F Nwanze, the President of IFAD and Mustafa Mkulo, the Tanzanian Minister for Finance and Economic Affairs.
According to IFAD, although agriculture is a significant driver of growth for the Tanzanian economy, “limited access to financial services, markets and opportunities for value addition”, has prevented the sector from making a significant impact on poverty reduction. This new IFAD program, which is co-funded by the African Development Bank (AfDB) and the Kenyan partnering organization Alliance for a Green Revolution in Africa (AGRA), aims to implement a development strategy for agriculture which involves building the capacity of commercial banks that lend to agricultural concerns and implementing improved governance and management systems in rural microfinance institutions (MFIs).
Approximately 500,000 rural households including farmers, livestock keepers and traders are expected to benefit directly from the program [1].
By Medha Ravi, Research Associate
About the International Fund for Agricultural Development (IFAD):
The International Fund for Agricultural Development (IFAD), an agency of the United Nations, was established in 1977 as an outcome of the 1974 World Food Conference. IFAD is dedicated to eradicating rural poverty in developing countries by focusing on country-specific solutions. Since 1978, IFAD has invested USD 12 billion in 860 projects and programs. Another USD 19.6 billion has been contributed in co-financing from governments; project participants; and multilateral, bilateral and other donors.
About African Development Bank (AfDB):
Established in 1964, AfDB is a development bank that provides loans and grants to governments and private companies in Africa. AfDB commits approximately USD 3 billion annually to African countries. Owned and funded by member governments, the bank has a public-interest mandate to reduce poverty and promote sustainable development. Currently, AfDB shareholders consist of 77 member countries, which include 53 African countries. AfDB reported total assets of USD 27 billion as of December 31, 2009.
Source and Resources:
[1] newKerala.com news article, “Tanzania to boost from UN loan to boost rural economy”, http://www.newkerala.com/news/world/fullnews-164928.html
MicroCapital.org story, November 8, 2010, “MICROCAPITAL BRIEF: African Development Bank (AfDB) to Provide $23m in New Funding to Tanzanian Small Entrepreneurs Loan Facility (SELF), 1600 Microfinance Institution (MFI) Staff Members to Upgrade Skills”, https://www.microcapital.org/microcapital-brief-african-development-bank-afdb-to-provide-23m-in-new-funding-to-tanzanian-small-entrepreneurs-loan-facility-self-1600-microfinance-institution-mfi-staff-members-to-upgrade-s/
MicroCapital.org story, July 2, 2010, “MICROCAPITAL BRIEF: International Fund for Agriculture and Development (IFAD) Allocates $8m to Al-Amal Microfinance Bank in Yemen”, https://www.microcapital.org/microcapital-brief-international-fund-for-agriculture-and-development-ifad-allocates-8m-to-al-amal-microfinance-bank-in-yemen/
MicroCapital Universe Profile: International Fund for Agricultural Development (IFAD), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Fund+for+Agricultural+Development+%28IFAD%29
MicroCapital’s Microfinance Universe Profile: African Development Bank (AfDB), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Asian+Development+Bank+%28ADB%29
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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