Togo and IFAD partnering for improved financial services and job creation for rural people

Over 50,000 vulnerable rural households in Togo will benefit from a US$35 million project that aims to spur inclusive rural economic growth and create employment opportunities in rural areas through a value chains approach, according to the details of a financing agreement signed by the government of Togo and the International Fund for Agricultural Development (IFAD).

The financing includes a $3.7 million loan and $3.7 million grant from IFAD. It will be co-financed by private sector financial institutions ($6.3 million), the Government of Togo ($3.8 million), and the beneficiaries themselves ($1.8 million). The financing gap of $15.6 million will be covered by other sources of financing or by the IFAD resource allocation cycle for Togo for the period 2019-2021.

The agriculture sector is the backbone of the economy of Togo. It provides 60 percent of employment and contributes 41 percent of GDP. The new project will first develop the production and marketing of rice, market gardening, maize, and poultry, in order to improve the food and nutritional security of rural communities.

“Although the agriculture sector remains the main employer for young people, especially women in Togo, the financial sector operators hesitate to provide them with credit,” said Lisandro Martin, Regional Director for West and Central Africa Division of IFAD. “ProMIFA will facilitate sustainable access to financial services tailored to smallholder farmers and micro, small and medium-sized agricultural enterprises so they can develop their activities and gain access to markets.”

The project will support the establishment of a financing and risk-mitigation mechanism, develop new financial products and improve the quality of financial services. ProMIFA will also provide training to financial institutions to enable them to assist smallholders in drafting business plans and provide them with financial products that meet their needs.

Since 1983, IFAD has financed eight rural development programmes and projects in Togo at a total cost of $252.5 million, with an IFAD investment of $94.8 million. These projects and programmes have directly benefited nearly 320,000 rural households.

Original source: IFAD
Published on 07 February 2019