A new financial agreement, signed today by the International Fund for Agricultural Development (IFAD) and the Republic of Mozambique, will help more than 287,700 rural people engaged in agriculture, fisheries and small and medium-sized enterprises in 10 provinces improve their access to national and regional markets.
Despite the opportunities created by rising demand for food, rural people are often held back by a lack of resources, services and access to markets. According to IFAD Representative and Country Director to Mozambique, Robson Mutandi, the key constraint is credit and banking services.
This new project supported by IFAD will focus on the poor and disadvantaged to ensure that rural finance services reach the underserved communities and financially excluded groups, said Mutandi.
The agreement for the Rural Enterprise Finance Project (REFP) was signed in Rome by Cornelia Richter, Vice-President of IFAD, and Maria Manuela Dos Santos Lucas, Deputy Minister for Foreign Affairs of the Republic of Mozambique.
The total cost of the programme is US$72.5 million, including a $62.1 million grant from IFAD. The programme will be cofinanced by the Government of Mozambique ($4.3 million), the beneficiaries themselves ($1.1 million) and the private sector ($5.0 million).
Lack of access to financial services and technical resources is becoming an increasingly critical constraint for smallholders seeking to expand and intensify their activities. REFP aims to increase the availability and use of appropriate, affordable and innovative financial and technical support services, but also to help raise very poor rural people to a level that they are creditworthy by improving financial literacy and capacity.
Digital financial services will be developed for agricultural and rural finance products, while training will be provided to rural agricultural and non-agricultural entrepreneurs, and support given to institutions that work with the rural population.
Since 1979, IFAD has financed 13 rural development programmes and projects in Mozambique at a total cost of $472.7 million, with an IFAD investment of $306.0 million. These projects have directly benefitted more than 2 million rural households.