Rabo Rural Fund in 2020: Focus on sustainable growth
Drought, heavy rainfall, plant diseases, volatile prices on the global market, and on top of all that: the coronavirus pandemic. Farmer’s organizations around the world faced some major challenges in 2020. Especially if they found themselves in the ‘missing middle’ – grown too large for support from Rabo Foundation, but still too small for standard bank loans. Rabo Rural Fund helps these organizations continue growing.
How Rabo Rural Fund works
We’re active in the most economically, socially and ecologically vulnerable countries in Africa, Asia, and South- and Central America. There, farmers' organizations produce grow crops such as spices, vegetables, nuts and quinoa. They are deeply rooted in their communities, and play a key role in creating jobs and generating incomes and food security. They also often have difficulty finding commercial investors. But where normal banks see only risks, the Rabo Rural Fund sees opportunities. Especially opportunities to make local food production sustainable, and to increase the income of smallholder farmers. We invest in the growth of agricultural enterprises in order to contribute to sustainable economic development.
Our focus in 2020
Supporting customers during the crisis
Reaching more farmers via MFIs
Sharper focus on environmental impact
The organizations we finance are mainly active in the international export market. But with the lockdowns, they faced problems in transporting their goods, and with buyers who couldn’t always meet their obligations. So our focus over the past year has mainly been on supporting our customers through this difficult time, for example by granting loan deferrals. But especially by staying in close contact to hear how they were doing and if they needed extra financial resources or deferrals of payments.
From opening a debit or savings account, to taking out loans or insurance policies: access to funding is vital for economic growth and social development. It also isn’t just producer cooperatives and small- and medium-sized enterprises in developing markets that have trouble finding commercial loans. Microfinancing institutions (MFIs) also face the same when they outgrow support from NGOs like Rabo Foundation. So in 2019 we began financing these MFIs as well. In 2020, our portfolio grew to include six MFIs that reach a combined 700,000 farmers, 75% of whom are women.
In addition to economic and social changes, since 2019 we have placed even more emphasis on environmental impact. We increasingly support projects that improve the farmer’s influence on their environment. In Mexico, for example, we financed an organization that produces lettuce for the international market. The business strives to have a neutral, or even positive impact on the environment. The organization improves biodiversity without sacrificing agricultural production or incomes. It also has social impact by creating jobs, especially for women in the region.
A brief selection of what we’ve achieved
Combining efforts for greater impact
In 2020, we further tightened our connection with the Rabo Foundation by coordinating our strategies together. Rabo Foundation also began issuing guarantees for its partners that had grown to the level of Rabo Rural Fund. Moreover, we strengthened our contacts within Rabobank departments such as Trade Commodity Finance (TCF) and Agri3Fund. We are examining how we can improve our collaboration at individual links in Rabobank customers’ value chain. For example by bringing producer organizations at the start of the chain we are financing into contact with buyers or traders served by TCF.
In addition to our partnership with CSAF, a collaborative effort by impact lenders with similar activities, we also joined in the realization of Aceli in Africa. This fund supports small agricultural businesses in East Africa via bank guarantees and grants.
Impact highlights
$ 51.4 million
total disbursement in impact lending
56 businesses financed
in 15 countries in Africa, Asia, Central America and South America
234,000 smallholder farmers
reached via the producer cooperatives and SMEs we financed in 2020.
So far in 2021
Even more focus on climate change
Focus on growth
We will continue to pay even more attention to climate change in 2021. Many farmers have seen their soils damaged by drought, extreme rainfall or erosion.
The coronavirus pandemic is still far from over, and its effects are palpable. We will continue to support our customers in these uncertain times. Now that borders are gradually opening, we will focus on financing even more customers in the countries where we’re active, so that they can become economically stronger, stand on their own two feet, and make an even greater contribution to solving the global food problem.