FAO signed a Memorandum of Understanding with Crédit Agricole, S.A. to promote and support practical actions for improving the provision of financial services to small farmers and agro-enterprises in developing countries. Through this partnership, FAO and Crédit Agricole, S.A. seek to: (i) develop sustainable financial and business linkages between banks, local financial institutions, microfinance institutions, producer organizations, agro-enterprises and support service providers; (ii) improve small farmers’ access to financial services through different actors in the agricultural value chains; and (iii) improve the products, services and operational systems of financial service providers. Current review studies are being undertaken in Mali to identify the feasibility for launching pilot activities in the coming year.
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)
German development cooperation provides advice and financing for the development and reorganization of financial institutions and rural financial systems. In many countries, microfinance institutions set up with German financial cooperation and technical cooperation have contributed substantially to the existing financial institution landscape. In the area of rural finance, GTZ offers advice for institution building in rural areas, policy advice, training in rural and agricultural finance, computerisation of small-scale banks and agricultural bank reform and support to networks of agricultural financial institutions.
Over the years, FAO and GTZ have teamed up on several important initiatives in rural finance, such as:
The FAO/GTZ MBWin is a banking software designed and developed for a wide range of banks and financial intermediaries. Because of its multi-tier architecture, the system is highly scaleable and can, therefore, cater to a wide range of users and be adapted to a variety of hardware configurations. It is modular in terms of applications and functionality.
Publications: FAO and GTZ have co-produced a number of publications in the area of rural and agricultural finance under the label “Agricultural Finance Revisited
The Frankfurt School of Finance and Management is a leading training and development institution for the indicated sectors. FAO and FSFM have a history of collaboration on research and materials development on agricultural finance. Currently the two organizations are developing a 2nd edition of the jointly produced “Agricultural Production Credit Toolkit” and with the FSFM subsidiary ConCap Connective Capital have recently undertaken research on Agricultural Investment Funds for Developing Countries.
International Fund for Agricultural Development (IFAD)
Rural finance is considered by IFAD as a vital tool in poverty reduction and rural development. Two thirds of IFAD’s current projects have a rural finance component. Most of IFAD’s target groups are small producers engaged in agricultural and non-agricultural activities in areas of widely varying potential. IFAD’s interventions in rural finance aim to encourage institutional diversity while maintaining a clear focus on sustainability.
IFAD and FAO have a strong organizational partnership for promoting rural finance activities. Most notably, IFAD is an instrumental partner in the CABFIN Project, As an active member of the CABFIN Steering Committee it has provided strong financial and technical support for the development of the Rural Finance Learning Centre, as demonstrated most recently with its approval of a second technical assistance grant for US$ 200 000.
The objective of the World Bank group's strategy for rural finance is to increase the access to financial services by low-income households by improving the policy, legal and regulatory frameworks that allow innovative financial institutions to develop and operate effectively, providing training in best practices that help banks and microfinance organisations to expand their outreach and develop sustainable operations and encouraging innovative approaches and financial products through equity investments.
The World Bank made important early funding and technical contributions to the CABFIN Project. Today, it continues to be an active member of CABFIN as well as providing on-going technical support for the development of the Rural Finance Learning Centre.
Recently, FAO and The World Bank teamed up to jointly fund the Expert Meeting on Managing Risks in Financing Agriculture. This event was organised by The African Rural and Agricultural Credit Association, AFRACA, and took place in Johannesburg, South Africa, 1-3 April 2009. The World Bank Group continues to work closely with AFRACA, with whom also FAO enjoys a long and active collaboration since its creation in 1975.
Regional Agricultural Credit Associations (RACAS)
Following the 1975 World Conference on Agricultural Credit, FAO promoted the establishment of regional agricultural credit associations (RACAs) consisting of financial institutions serving agriculture and rural households and businesses. The work of the member-based RACAs includes: 1) fostering cooperation for improving rural and agricultural financing, 2) undertaking and publishing inter-country studies on matters of common interest in the field of rural finance, 3) organizing training programmes and learning exchanges of personnel and experts among the members, and 4) facilitating cooperation on rural finance projects between the members and donors.
The three such regional associations – one for Africa, one for Asia and one for the Near East and North Africa – and a fourth partner association in Latin America, Association of Development Finance Institutions in Latin America (ALIDE), are very active and have, over the years, become financially and operationally independent from FAO and today work on joint research, joint collaboration on conferences and technical workshops with FAO as partners.
The members of the Regional Agricultural Credit Associations include:
Agricultural Development Banks
Central Co-operative Banks
Bank Federations/ Associations
Crop Insurance Corporations
Ministries of Agriculture
Foundations, NGOs, Co-operatives
Website and email
African Rural and Agricultural Credit Association
ACK Garden House 2nd Floor, Wing A 1st Ngong Avenue PO Box 41378 Nairobi, Kenya