Financing Inclusive Rural Transformation

  • 14th February 2017
  • by secretary
27 January 2017. The International Fund for Agricultural development (IFAD) and the Italian
Ministry of Economy and Finance announced the establishment of the Smallholder Agriculture Finance and Investment Network (SAFIN).

The network aims to bridge an estimated US$150 billion gap in financing and investments necessary to enable small agricultural producers and businesses in developing countries to expand their operations and stabilize the rural economy. To mobilize these investments, SAFIN will coordinate activities between private, public and philanthropic investors and rural farmers and enterprises to address finance and investment challenges.

The network targets small and medium-size producers and enterprises that are considered too big for microfinance, yet too small to access regular credit and investment markets, a group often referred to as the “missing middle.” The initiative’s specific objectives are to: create a space for sharing best practices and knowledge among a diverse multi-stakeholder membership; leverage the collective knowledge of the members, and identify research and investment gaps; support and encourage innovation; and promote policy alignment, dialogue and joint progress towards an enabling environment for smallholder agriculture finance.

The announcement for SAFIN was made during a conference titled, ‘Investing in Inclusive Rural transformation: Innovative Approaches to Financing,’ held 25-27 January 2017 and organized by IFAD and the Italian Ministry for Economy and Finance. 

The conference aimed to advance global efforts in achieving SDG 1 (end poverty in all its forms everywhere) and SDG 2. The meeting followed-up on IFAD’s 2016 Rural Development Report, which assessed processes of rural transformation. Among other conclusions, the report found that while most developing countries are undergoing rapid processes of rural transformation, such processes are not always beneficial for the rural population. Inclusive rural transformation requires distinct agricultural policies as well as policy reforms, institutional innovations and investments.