€3M IFAD Loan to Benin Microfinance Giant to Create Over 10,000 Rural Jobs

Benin’s Rural Economy to Receive a Boost as IFAD and PEBCo-BETHESDA Unite to Expand Inclusive Finance.

In a landmark development for rural livelihoods in Benin, the country’s leading microfinance institution, PEBCo-BETHESDA, has secured a €3 million loan from the United Nations’ International Fund for Agricultural Development (IFAD). The initiative is expected to generate over 10,000 new jobs by empowering smallholder farmers and rural entrepreneurs through expanded access to microfinance services.

The agreement is part of IFAD’s ongoing commitment to rural development in West Africa and aims to enhance financial inclusion, particularly among underserved populations such as women and youth. The loan will provide critical financial resources to support micro and small enterprises in the agricultural sector, with ripple effects expected to improve the livelihoods of over 120,000 people.

Targeting the Most Vulnerable: Women and Youth at the Forefront

The program is designed with an inclusive focus. Of the more than 20,000 individuals directly reached by the new financial services, approximately 40% live below the poverty line. Notably, nearly 75% of the loan recipients will be women, and one in every three will be young individuals—two groups that historically face significant barriers to accessing credit and financial tools.

Bernard Hien, IFAD’s Regional Director for Western and Central Africa, emphasized the importance of inclusive finance as a catalyst for transformative rural development. “Increased access to finance for underserved, low-income communities, with a strong focus on women and youth, will help improve the livelihoods of some of the most vulnerable rural people of Benin,” he said.

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Innovation and Resilience: Financing Climate-Smart Agriculture

The loan will be deployed to scale PEBCo-BETHESDA’s outreach and enable the development of innovative, climate-resilient financial solutions. These include not just traditional loans and savings products but also support for digital financial services, agricultural insurance, and funding for inputs such as high-yield seeds, fertilizers, mechanization, and agro-processing tools.

According to Cyrille Hounsou, Managing Director of PEBCo-BETHESDA, “This loan represents a turning point for our institution and for the communities we serve. Thanks to IFAD’s support, we will scale our outreach, develop innovative financial solutions, and empower more rural entrepreneurs, particularly women and youth to build sustainable livelihoods and adapt to a changing climate.”

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Farming at the Core: Boosting Key Agricultural Value Chains

The initiative focuses on strategic value chains that are crucial to Benin’s food security and economic stability. Rice, soya, pineapple, cassava, and maize are among the priority crops that will benefit from increased financing. By offering farmers and agricultural cooperatives loans for expanding production and adopting sustainable practices, the project is expected to elevate productivity and economic resilience in rural communities.

PEBCo’s existing model—where farmers receive average loans of €745 (with a breakdown of €816 for men and €680 for women), and farmer groups or businesses receive up to €1,799—has already demonstrated success in improving access to capital where traditional banking systems fall short.

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Strategic Alignment: Supporting National and Global Development Goals

Agriculture remains a backbone of Benin’s economy, contributing 70% of employment and nearly a quarter of GDP. Despite consistent economic growth rates of 4–5% over the last two decades, poverty levels remain high at around 56%. IFAD’s new investment is aligned with Benin’s national development objectives and the broader mandate to strengthen food systems and climate resilience.

The microfinance initiative also builds upon IFAD’s longstanding commitment to Benin, having invested over US$257 million across 14 projects since 1978. This new loan is expected to create synergies with existing IFAD-funded projects to maximize impact and reach.

Legacy and Vision: IFAD’s Role in Global Microfinance

IFAD’s involvement in microfinance dates back to the early 1980s, notably as one of the first supporters of the now-iconic Grameen Bank, which won the Nobel Peace Prize in 2006. This current collaboration with PEBCo-BETHESDA continues that legacy by applying decades of development finance expertise to one of Africa’s most pressing challenges: rural poverty.

As the program is rolled out, it promises not only to improve individual livelihoods but also to drive broader economic transformation through job creation, agricultural productivity, and inclusive, sustainable development.