The World Bank, member of US-based multilateral World Bank Group, and the Rabobank Foundation, the “social fund” of the Dutch bank Rabobank, recently teamed up to consolidate agricultural cooperative financial institutions (CFIs), organizations set up by farmers to gain access to financing. The goal is to increase efficiency and leverage scale to better serve smallholder farmers and contribute to the development of rural economies.
The effort is modeled on a program in Albania through which Rabobank and the Irish League of Credit Unions Foundation are supporting the unification of two CFI federations, while the Bank of Albania is working to reform deposit insurance laws with the support of the World Bank.
The World Bank and the Rabobank Foundation plan to replicate the program in two or three of the following countries: Colombia, Cote d’Ivoire, Democratic Republic of the Congo, Haiti, Madagascar, Myanmar, the Philippines and Tanzania. To do this, the institutions are seeking funding from the following sources: (1) The Global Agricultural and Food Security Program (GAFSP), a multilateral mechanism established by the G20 group of 20 large economies, which is considering funding market studies and strategic plans; (2) The Financial Sector Reform and Strengthening Initiative (FIRST) and Financial Inclusion Support Framework (FISF), which would support regulatory and supervisory reform; (3) FIRST and the Rabobank Foundation, which would provide part of the funding required to create a “center of excellence” related to the consolidations.
As of December 2014, the Rabobank Foundation reported total assets of EUR 35.6 million (USD 40.6 million). As of the same date, WBG had commitments of USD 60 billion in loans, grants, equity investments and guarantees to its members and private businesses.
By Kevin van den Brink, Research Associate
About The Rabobank Foundation
The Rabobank Foundation was created in 1973 by Rabobank Group, a bank located in the Netherlands. In the Netherlands, the Foundation focuses on three main themes: health and welfare; sports and recreation; and employment and education. In developing countries, the Foundation provides loans and other financial services to microfinance institutions (MFIs). The Rabobank Foundation partners with the following organizations: Liliane Foundation, Procotton, Pro Fruta, Terrafina Microfinance, Agri-ProFocus, Progreso Coffee Fund, Cordaid, Woord en Daad and the Netherlands Platform for Microfinance. As of December 2014, the Rabobank Foundation reported total assets of EUR 35.6 million (USD 40.6 million).
About The World Bank
Established in 1944, the World Bank is comprised of two development institutions, International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA), which provide leveraged loans to developing countries for capital programs. IBRD, which comprises 188 countries, makes loans and grants and provides analytical and advisory services to middle-income countries and poorer countries that are deemed creditworthy, with the aim of promoting sustainable development to reduce poverty. IDA, which exists out of 173 countries, offers interest-free credits and grants to the world’s 81 poorest countries, where a majority of the people live on less than USD 2 per day. IDA resources and technical assistance support country-led poverty reduction strategies in the following policy areas: increased productivity, governance and accountability, private investment climate, and access to education and healthcare. The World Bank is a member of the World Bank Group, which also encompasses the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID). As of June 2015, the World Bank has provided USD 60 billion in loans, grants and equity investments.
Sources and Additional Resources
MicroCapital Universe Profile: Rabobank Foundation
MicroCapital Universe Profiel: The World Bank
MicroCapital Universe Profile: The World Bank Group
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