Ethiopia and International Fund for Agricultural Development (IFAD) have signed a new agreement of US$305.7. These aimed at helping more than 13 million vulnerable farmers in Ethiopia “to increase and diversify their incomes, access financial services and build their resilience in rural areas threatened by climate change,” a statement from IFAD said.
“A financing agreement for the Rural Financial Intermediation Program III (RUFIP III) was signed by Gilbert F. Houngbo, President of the International Fund for Agricultural Development (IFAD), and Zenebu Tadesse Woldetsadik, Ambassador, Permanent Representative of Ethiopia to the United Nations Food and Agriculture Agencies in Rome,” IFAD said.
According to Ulaç Demirag, Country Director for Ethiopia, financial access is very important for rural people particularly those whose incomes are threatened by a changing climate to expand their businesses and to take advantage of new emerging livelihood opportunities along the agricultural and agro-industrial value chain.
The Rural Financial Intermediation Programme (RUFIP) III will build on the lessons and experiences of the first two phases of the program and will scale up delivery of rural financial services tailored to the needs of the most vulnerable smallholder farmers, particularly women and young people.
It will strengthen the capacity of rural finance institutions to deliver an expanded range of financial products and services to a large number of rural poor people. It will also support the uptake of these products by rural savings and credit cooperatives and microfinance institutions through financial literacy training. To allow smallholder farmers to moderate the risks related to climate change the government will develop insurance products through rural finance institutions
“The program will also promote nutrition awareness through campaigns and demonstrations, targeting the area’s most vulnerable to food insecurity due to climate change. It will also help farmers and small enterprises to enhance their resilience to weather-related shocks.”
The funding includes a $35.1 million grant and a $4.9 million loan from IFAD, with significant co-financing from international development partners and from national financial institutions. $51.9 million is contributed by The Government of Ethiopia and $0.9million from the beneficiaries themselves.
IFAD has invested $795.5 million in 20 rural development programs and $2.1 billion in projects in Ethiopia, since 1980. These have directly benefited around 12 million rural households, the statement said.