Bank of Kigali, the International Fund for Agricultural Development (IFAD) and Aceli Africa have launched a $21 million financing programme to improve access to capital and financial services for farmers’ organisations and smallholder farmers in Rwanda.
The agreement was signed on Friday, September 4, during the Africa Food Systems Forum in Kigali.
Named the Farmers’ Organizations Financing Programme–Rwanda (FOFP-R), the initiative combines $12 million from IFAD with $9 million in co-financing from Bank of Kigali.
The programme is expected to strengthen approximately 215 farmers’ organisations and provide financing to around 172 of them.
More than 35,000 smallholder farmers are expected to benefit, with particular attention given to women and young people.
The financing will support agricultural value chains including maize, rice, cassava, dairy and horticulture.
IFAD Vice-President Dr Gérardine Mukeshimana said the programme represents a broader shift towards innovative agricultural financing that combines capital, institutional support, partnerships and entrepreneurship.
She said the initiative is expected to reduce investment risks, attract additional funding and create more opportunities for rural entrepreneurs, farmers’ organisations and small-scale producers.
Agriculture employs more than 70 per cent of Rwanda’s population and contributes approximately 25 per cent of the country’s gross domestic product.
Despite its importance to livelihoods and economic growth, the sector continues to receive only a small proportion of the credit issued by financial institutions.
Farmers’ organisations help members aggregate production, access agricultural inputs and markets, and connect with financial service providers.
However, nearly 70 per cent of their financing needs remain unmet because of challenges including insufficient collateral, weak financial records, limited governance capacity and low financial literacy. These constraints increase the level of risk perceived by lenders.
Bank of Kigali Chief Executive Officer Dr Diane Karusisi said: “Farmers’ organizations are the backbone of Rwanda’s agricultural economy, yet they have long been underserved by traditional financing.”
She said the partnership will combine capital with technical assistance to help farmers’ organisations strengthen their governance and financial-management systems.
Of IFAD’s $12 million contribution, $9 million will be provided as a loan. A further $1.8 million will be used as a risk-sharing grant, while $1.2 million will finance technical assistance.
The technical support will help farmers’ organisations improve their governance, financial management and digital capacity. It will also assist Bank of Kigali in developing the tools and expertise required to serve agricultural organisations sustainably.
The programme received a $6 million allocation to IFAD through the Business Investment Financing Track, a financing mechanism under the Global Agriculture and Food Security Program.
The mechanism provides grants and concessional financing for initiatives serving smallholder farmers and early-stage micro, small and medium-sized agribusinesses in low-income countries.
GAFSP Head Shobha Shetty said the financing model would promote more inclusive capital markets in Rwanda and enable smallholder farmers, women and young people to invest in their future.
FOFP-R is financed through the IFAD Private Sector Trust Fund and has also received support from GAFSP and the Government of Canada.
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