The International Fund for Agricultural Development (IFAD) has launched the Private Sector Financing Programme (PSFP), an ambitious new financing initiative to address rising hunger and poverty levels in Nigeria and other poor countries.
PSFP aims to spearhead an increase in much-needed private investment in small and medium-sized enterprises, farmers’ organisations and financial intermediaries.
As part of its launch, the PFSP announced its first loan of $5 million (about N2,058,151,375) to a Nigerian social impact enterprise, Babban Gona, which has a strong background in moving small-scale farmers from subsistence to a more market-orientated model.
The loan will help Babban Gona support 377,000 small-scale rice and maize producers in Nigeria with a comprehensive package of training, quality inputs, and marketing services.
Babban Gona will also store and sell the harvest on behalf of its farmers when prices are higher.
They aim to create up to 65,000 jobs for women and 66,500 jobs for youth by 2025.
By committing these funds, the PSFP aims to stimulate larger contributions from other investors and help Babban Gona meet its target to raise $150 million to reach millions of small producers.
IFAD, under the programme, aims to mobilise $200 million for the PSFP from public, private and philanthropic sources to leverage a total of $1 billion in private investments.
This is expected to improve the lives of up to five million small-scale farmers globally. The PSFP will focus its investments on job creation, women’s empowerment, building farmers’ resilience and accelerating climate change mitigation.
IFAD President Gilbert F. Houngbo explained the need for the programme in a statement to The Nation by APO Group on behalf of IFAD.
“We can end poverty and hunger! But to achieve this, we urgently need to stimulate more private sector investments to rural areas and unlock the immense entrepreneurial potential of millions of rural SMEs and small producers.
“With access to capital, they can attract more investors and partners, grow their businesses and create employment opportunities – especially for young people and women.”