Eswatini and IFAD partner to boost inclusive financial services for smallholder farmers

Eswatini and IFAD partner to boost inclusive financial services for smallholder farmers   Rome, 2 October 2019 - About 30,900 rural people in the Kingdom of Eswatini will benefit from a new US$38.5 million project that aims to improve the prosperity and resilience of poor and vulnerable smallholder farmers and micro-entrepreneurs in the country. The financing agreement for the Financial Inclusion and Cluster Development Project was signed by correspondence by Gilbert F. Houngbo, President of the International Fund for Agricultural Development (IFAD), and Neal H. Rijkenberg, Minister of Finance of the Kingdom of Eswatini. Project financing includes an $8.9 million loan from IFAD. The project will be cofinanced by a Financing Facility for Remittances grant ($300,000); the Government of Eswatini ($2.9 million); the enterprises ($7.4 million) and the beneficiaries themselves ($13.8 million). IFAD is negotiating with the Green Climate Fund and Global Environmental Fund to secure the climate financing ($5.0 million). In Eswatini, 63 per cent of the population live in poverty and 89 per cent of the poor people, particularly young people and women, live in rural areas. It is essential to provide new livelihood opportunities through the development of the agricultural sector in rural areas to enable rural people to build better lives for themselves and their families. However, significant obstacles prevent most smallholders from taking advantage of these opportunities. They are held back by lack of quality inputs such as seeds, access to markets, financial services, high exposure to changing rainfall patterns and limited irrigation systems. The Financial Inclusion and Cluster Development Project aims to increase returns from sustainable farm and non-farm enterprises including by targeting poor rural women and youth aged 18-35 through efficient public and private sector investment. Implemented nationwide, based on cluster development for impact, it will focus on five commodities: red meat (beef and goats), poultry, pigs, vegetables and legume seeds. ”This new project is fully aligned with the Kingdom of Eswatini’s various development strategies, which aim to improve marketing and processing infrastructure, improve access to market information and link farmers to markets,” said Jaana Keitaanranta, IFAD Country Director for Eswatini. The project will include investments in good agricultural practices – better quality seeds and irrigation systems – to improve productivity and production all year round. It will support producers to gain access to financial services and develop their business skills through training. The project will also promote gender and youth inclusion, and improve nutrition through greater access to diversified foods and higher incomes. Since 1985, IFAD has financed six rural development programmes and projects in Eswatini at a total cost of $210.5 million, with an IFAD investment of $53.3 million. These projects and programmes have directly benefited 60,055 rural households.