New support to foster agricultural lending in developing countries
- Nov 26, 2018
Incofin IM signed agreements with the EIB, PROPARCO (the subsidiary of Agence Française de Développement focused on private sector development), the Belgian Investment Company for Developing Countries (BIO) and the agRIF Cooperatief U.A. (the agRIF Fund) for a total commitment of close to EUR 2 million.
- The EIB and Incofin Investment Management (Incofin IM) join forces to launch a EUR 2 million Technical Assistance Facility (the agTAF) to foster agricultural lending in developing countries
- The new Facility will provide advice to microfinance institutions to better serve smallholders farmers and rural entrepreneurs
Incofin IM signed agreements with the European Investment Bank (EIB), PROPARCO (the subsidiary of Agence Française de Développement focused on private sector development), the Belgian Investment Company for Developing Countries (BIO) and the agRIF Cooperatief U.A. (the agRIF Fund) for a total commitment of close to EUR 2 million. The agreement, signed in September 2018, will enable the provision of tailored capacity-building support under the agTAF, a new Technical Assistance Facility that will be complement the agRIF Fund, a close-ended fund managed by Incofin IM that invests in financial intermediaries lending to the rural sector. The EIB’s contribution to the new agTAF Facility is EUR 1 million.
The objective of the agTAF is to foster financial inclusion of smallholder farmers and rural entrepreneurs through increasing outreach and improving capacity of selected financial institutions, producer organizations and agricultural value chain SMEs. The agTAF will support investees of the agRIF Fund in developing innovative products and channels to bring affordable financial services closer to underserved rural and agricultural clients, as well as in improving risk management techniques and overall financial, social and environmental performance.
“The support of the donors is extremely important to unlock the potential of our clients in generating social impact at a large scale”, says Loïc De Cannière, Managing Director of Incofin IM. He adds, “The timing of the launch of agTAF comes at the right moment, as the agRIF Fund has built up a significant number of agriculturally focused investments and we observe a high need to support these investees in realizing their impact objectives”.
“Lending to the agricultural sector is crucial for the development of rural areas; yet can be challenging for financial institutions. Supporting technical assistance alongside our investment in the agRIF Fund is an imperative for us to ensure that microfinance companies are not only financed, but also receive the necessary technical support to improve their business with smallholder farmers”, says Hannah Siedek, Microfinance Loan Officer at the EIB.
The agTAF will be governed and receive strategic guidance of the Steering Committee, which will be represented by the donors and the agRIF Fund. Incofin IM will be responsible for the operational management of the fiduciary assets, which will be held by KBL European Private Bankers. The agTAF will operate for an initial period of 5 years and will support the investees of the agRIF Fund in Africa, Asia, Latin America and Eastern Europe. Incofin IM plans to mobilize an additional EUR 2.5 million by attracting like-minded DFIs, private foundations and other partners who believe in inclusive and sustainable progress.
About the agRIF Fund
Launched in 2015 and managed by Incofin IM, the agRIF Cooperatief U.A. Fund proposes financial services in developing countries. agRIF is a third generation close-ended fund, following on Rural Impulse Fund I and Rural Impulse Fund II, that invests in financial inclusion for the rural sector. agRIF specifically targets the agricultural sector and smallholder farmers, as well as rural micro-entrepreneurs. For more information, please see: http://www.incofin.com/