IDH Sustainable Trade Initiative, in coalition with Unilever, Jacobs DE, Mondelez and Rabobank, has launched the IDH Farmfit Fund, world’s biggest-ever impact fund for smallholder farmers finance.
Starting with $110.82 million, the IDH Farmfit Fund is expected to catalyze up to a billion euros of commercial investments into smallholder farmers in developing countries.
The IDH Farmfit Fund is facilitated by IDH and is backed by significant funding from the Dutch Ministry of Foreign Affairs and a guarantee from the US Agency for International Development.
“The lack of capital for smallholders to invest in sustainable practices leads to rural poverty and environmental damage. While climate change originates from emissions, the battle is on the ground,” said Joost Oorthuizen, executive director and Chairman of the Board at IDH.
“The catastrophes we have seen lately are heavily amplified by land management issues. The fund will dramatically improve their ability to cope with the impacts of climate change and their possibility to earn a decent income.”
A fuller picture of the IDH Farmfit Fund was revealed at Davos during the World Economic Forum Annual Meeting, in the SDG tent.
Her Majesty Queen Máxima of the Netherlands in her role as “United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA) opened the event.
She emphasized the need to go beyond business-as-usual to support smallholder farmers in improving their lives. Customer centricity and cross-sector partnerships are key for financial institutions to offer meaningful solutions while making a good business.
It is also important to identify critical market linkages in supply chains to improve efficiency and productivity. Farmfit is going beyond business as usual and is a great example of how businesses can help bring financial services to farmers.
The IDH Farmfit Fund will be guided by enabling resilient smallholder farming; having a positive impact on the environment, social and gender issues; supporting food security and climate protection; while supporting growth and financial innovation.
The 100-million-euro Farmfit Fund will catalyze investments into ESG impact by taking the highest risk positions in deals that improve smallholders’ livelihoods in Africa, Asia or Latin America.
Farmfit Business Support is a US$30 million investment from DFID (the Department for International Development in the UK) and others, which provides Technical Assistance support to Agri SMEs in order to develop and implement sustainable business models and increase their engagement with smallholder farmers.
Farmfit Intelligence creates and shares data-driven and systematic insights into efficiency and sustainability of service delivery models leading to better-informed investment strategies.