The Dutch development bank, FMO, and Rabobank invested €10 million each in the Utrecht-based Sustainable Trade Initiative’s (IDH) Farmfit fund. Farmfit is a blended finance fund and the world’s biggest public-private impact fund for smallholder farmers in emerging markets.
IDH, a nonprofit, manages the fund and is supported by a range of partners, including value chain players like Unilever and Mondelez, Jacobs DE, commercial and development banks, government bodies, and development agencies from the US, UK, Denmark, and the Netherlands.
Marianne Schoemaker, CEO of Rabo Partnerships at Rabobank, said the fund “builds a bridge between small-scale farms in Africa and our financial services. “For many banks, direct funding of small-scale farming in developing countries is a bridge too far. The chance of loans not being repaid is just too big.”
The fund also boasts a USD250 million guarantee facility via the US Development Finance Corporation, which will cover up to half of the “second loss” risk. Another important part of FMO’s decision to invest in the fund.