Rome, 22 February 2022 — The United Nations International Fund for Agricultural Development (IFAD) today launched the Innovatech project, which aims to develop digital agricultural (AgriTech) and financial (FinTech) solutions to facilitate access for small farmers to markets and financial resources and non-financial services in Bolivia, El Salvador, Guatemala, Haiti, Honduras and Mexico. The German Sparkassenstiftung for International Cooperation, an institution specializing in promoting local financial systems in developing countries, will implement the project, which is expected to directly benefit 9,000 rural households.
“The COVID-19 pandemic has created a new world. Economies have gone digital, and global and local food systems are following suit. It’s time for smallholder farmers to have access to new services and tools that can better connect them to This new Only then can they go beyond subsistence production to become successful entrepreneurs, able to provide livelihoods for their families and communities,” said Rossana Polastri, IFAD Regional Director for Latin America and the Caribbean.
“The IFAD-funded Innovatech project will provide a great opportunity for growth, development and innovation in the six countries where it takes place. I am very happy that the German Sparkassenstiftung can contribute to this process by bringing to the table its years of expertise and lessons learned in the area of digital financial services and rural development,” said Niclaus Bergman, CEO of the organization.
In Latin America, the COVID-19 pandemic has had a strong impact on smallholder farmers and their organizations. They faced many challenges, including difficulties in acquiring the resources and raw materials needed for food production, limited transport and marketing, and more difficult access to financial services and technical assistance.
At the same time, AgriTech and FinTech companies have grown rapidly in the region and the potential solutions they can offer are a priority for many policy makers. Despite the growing number of these enterprises, the services they offer to smallholder farmers remain limited, as most of them mainly target medium or large urban-based customers.
The challenge of improving the links between smallholder farmers and FinTech and AgriTech companies is considerable. However, doing so is particularly important to help smallholders overcome the unprecedented challenges caused by COVID 19. This will facilitate farmers’ demands for new services and technical solutions tailored to their needs, helping them to build back better and to build their resilience. to future crises.
Most tech companies are ready to improve and expand their services to serve smallholder farmers. However, still in their early stages of business development and with limited financial and human resources, the high cost of reaching customers in rural areas makes it prohibitive to do so on their own. Investments in the agriculture and fintech sectors are needed to build their capacity to deliver digital services and technology solutions to IFAD’s target group.
Innovatech will select twelve existing companies that are able and willing to adapt their digital services to the needs of smallholder farmers. Working with IFAD operational and technical assistance staff, companies will adapt, extensively test and implement solutions that match the needs and capacities of end-users (agricultural cooperatives, producer organizations, small and medium-sized enterprises rural areas) to connect smallholders to markets, services and finance.
Wider access to these financial and non-financial services will benefit more than 260 small producer organizations through improved productivity, marketing and financial viability. These 260 organizations are already involved in IFAD-funded projects in Bolivia (Procamélicos and ACCESOS Rural), El Salvador (Rural Adelante), Guatemala (Guateinnova), Haiti (PITAG and Purraco), Honduras (Prolenca and Proinorte) and Mexico (Proecosocial ).
By working in partnership with various value chain actors, such as value-added SMEs and local complementary service providers, it is expected that 36,000 households will ultimately benefit from improved access to digital financial and non-financial services. by the end of the project implementation period, including the most vulnerable groups such as indigenous peoples, rural women and youth. With an emphasis on gender equity and equality in all project components and activities, at least 50% of participants will be women.
IFAD and the German Sparkassenstiftung launched the Innovatech project today with a virtual event aimed at generating interest from representatives of digital businesses and producer organizations to engage with and benefit from the project.
The project is funded by a US$3.5 million grant from IFAD Stimulus mechanism for the rural poor, which was put in place after the onset of the COVID-19 pandemic to build the resilience of poor rural people affected by the crisis. Through the adoption of innovative technologies for farm management, flexible financial products and access to broader markets, smallholder farmers will be able to build their resilience to market shocks, climate risks and economic hardship. .
The initiative is in line with the policy responses to COVID and the priorities of the governments of the six targeted countries, as well as the emphasis placed by IFAD’s LAC Division on the 3R approach implement practical solutions leading to recovery, reactivation and resilience.
Press Release No.: IFAD/05/2021
IFAD invests in rural people, empowering them to reduce poverty, increase food security, improve nutrition and build resilience. Since 1978, we have provided US$23.2 billion in grants and low-interest loans to projects that have reached approximately 518 million people. IFAD is an international financial institution and a specialized agency of the United Nations based in Rome – the United Nations center for food and agriculture.
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Juan Ignacio Cortes Carrasbal