$21 Million Partnership Opens New Doors for Rwanda’s Smallholder Farmers

IFAD’s US$12 million package includes a US$9 million loan, a US$1.8 million risk-sharing grant and a US$1.2 million technical assistance grant.

A new US$21 million financing partnership is set to help Rwanda's farmers' organizations gain better access to credit, strengthen their operations and create more opportunities for thousands of smallholder farmers. The International Fund for Agricultural Development (IFAD), Bank of Kigali and Aceli Africa have joined forces under the Farmers' Organizations Financing Programme–Rwanda (FOFP-R), bringing together affordable lending, risk-sharing support and practical assistance tailored to the realities of agricultural businesses.

Financing Designed Around the Needs of Farmers

FOFP-R combines US$12 million from IFAD with US$9 million in co-financing from Bank of Kigali, giving farmers' organizations a stronger pathway to loans that many have struggled to secure through conventional banking channels. The programme is expected to strengthen about 215 organizations, provide financing to around 172 of them and benefit more than 35,000 smallholder farmers working across maize, rice, cassava, dairy and horticulture value chains, with particular attention given to women and young people.

Agriculture supports more than 70 per cent of Rwanda's population and contributes roughly one-quarter of national GDP, yet the sector receives only a small share of the country's total credit. Farmers' organizations can bring producers together, purchase inputs more efficiently, coordinate production, negotiate with buyers and connect rural communities with financial services, but many lack the collateral, reliable financial records and governance systems required by lenders.

Around 70 per cent of their financing needs remain unmet, leaving viable agricultural businesses unable to invest in equipment, storage, processing, digital systems or climate-resilient production. FOFP-R addresses these barriers by combining capital with support that can make farmers' organizations stronger borrowers and more dependable business partners.

Loans, Risk Protection and Practical Support

IFAD's US$12 million package includes a US$9 million loan, a US$1.8 million risk-sharing grant and a US$1.2 million technical assistance grant. The technical support will help participating organizations improve governance, financial management and digital capacity, while Bank of Kigali develops the tools and expertise needed to serve agricultural clients sustainably.

IFAD Vice-President Gérardine Mukeshimana described the programme as part of a wider shift towards financing models shaped by institutional partnerships, entrepreneurship and new approaches to risk. By reducing uncertainty for lenders and strengthening rural organizations from within, the initiative can attract additional investment while giving farmers and rural entrepreneurs more room to expand their businesses.

Bank of Kigali Chief Executive Officer Dr Diane Karusisi said innovation in banking should include fresh ways of reaching the farmers who power Rwanda's economy. The partnership connects financing with technical guidance, helping organizations build the records, structures and financial discipline required to access credit repeatedly rather than depending on one-time support.

Building a More Inclusive Agricultural Economy

The programme received a US$6 million allocation to IFAD through the Business Investment Financing Track of the Global Agriculture and Food Security Program. This mechanism provides flexible grants and concessional resources for financial solutions serving smallholder farmers and early-stage agricultural micro, small and medium-sized enterprises in lower-income countries.

GAFSP Head Shobha Shetty said the financing model will support more inclusive capital markets and help vulnerable people working across Rwanda's food system make investments that could transform their futures. Greater access to finance could allow farmers' organizations to raise productivity, manage climate and market shocks, reach stronger buyers and create employment in rural communities.

FOFP-R places farmers' organizations at the centre of agricultural investment, recognising that rural growth depends on more than lending alone. Strong governance, practical financial skills, digital tools and patient partnerships can turn organized farmer groups into credible businesses, giving thousands of producers a fairer chance to build secure livelihoods and contribute to Rwanda's economic growth.