The International Fund for Agricultural Development (Ifad) has launched the Blended Rural Financing Facility (BRFF) worth $24 million (about K41.66 billion), which is expected to transform agriculture financing for about two million farmers in Malawi.
The fund is under the Financial Access for Rural Markets, Smallholders and Enterprises (Farmse) programme, a seven-year project which aims at supporting poor Malawian graduates to a productive pathway.
In a statement yesterday, State House Press Secretary Anthony Kasunda said the new financing mechanism represents a strategic shift from traditional grant-based support to a self-sustaining revolving fund aimed at strengthening rural financial inclusion in Malawi.
Chakwera gives Mbago-Bhunu a gift during the meeting yesterday. | Govati
He said the facility is expected to leverage additional funding from private banks and microfinance institutions at a ratio of 2.5 times, bringing the total facility to $60 million (about K104.1 billion). “The fund will serve as a de-risking instrument,incentivising financial institutions to unlock their own resources as co-investment, ensuring the sustainability of rural financial support beyond the lifespan of Farms,” said Kasunda
He said the initial projections estimate that the facility will reach two million direct beneficiaries across Malawi. Additionally, 100 savings and credit cooperatives (Saccos) and 50 micro finance institutions
(MFIs) will receive support under the fund.
Kasunda also said a private sector fund manager under the oversight of the Government of Malawi will manage the facility to ensure accountability and long-term viability.
He said government gains from the BRFF include retention of the initial $24 million (about K41.66 billion) principal capital from IFAD as a long-term development resource, but also generation of proceeds from interest gained as the fund continues to revolve.
“The launch of the BRFF underscores the government’s commitment to sustainable rural financial development, in line with Malawi 2063’s aspirations for economic transformation through inclusive growth and financial resilience,” said Kasunda.
According to a Farmse update on the launch, Minister of Finance and Economic Affairs Simplex Chithyola- Banda said the faci l i ty will address long-standing challenges in rural financing while promoting inclusive economic growth.
He said: “The BRFF is a strategic financial tool designed to unlock catalytic and sustainable finance for Malawi’s rural agriculture sector, by combining public and private sector resources,” he said.
Speaking during the same launch, Ifad’s regional director for East and Southern Africa, Sara Mbago-Bhunu said the BRFF launch is timely.
“It exempl i f ies Ifad’s commitment to support Malawi’s efforts to transform its agricultural sector.
“It is projected that for every dollar invested by Ifad, the facility will leverage $2.5 maximising the impact of our investment,” she said.
May I seize the moment and occasion to thank MLS’vow to deal with malpractice.Malawi is strategizing to change mindset and be transformed as geared towards vision 2063.The saddest tale of lips and pens is the current political wrangles so rampant nationwide.It calls for National Unity and genuine democracy for any nation to achieve prosperity..Finally it’s, more than welcome as rightly urged during Eid by Muslims for peaceful elections this September.However there must be political canvass to redress unrest before campains commence.