Participants welcome initiative of AAAID to establish ‘Revolving loans fund’

September 28, 2020 - The Arab Authority for Agricultural Investment and Development (AAAID) successfully organized an online webinar entitled ‘Financing small and medium scale farmers and producers,’ which received wide praise for its pioneering experience in financing programs and activities for small and medium scale farmers and producers across a number of Arab countries. More than 1,000 participants attended the virtual webinar with the main goal to know more about the efforts aimed at achieving the sustainable development goals of eradicating hunger, achieving food security and promoting sustainable and smart agriculture.

The webinar served as a strategic platform to discuss financial resources to fund small and medium scale farmers, animal breeders, fishermen and those working in the agro-processing industries. AAAID explained that the creation of the revolving loans fund or contributing to the programs implemented by the Arab Authority is aimed at increasing production and expanding and developing the agricultural sector in Arab countries.

During the event, participants present welcomed the AAAID initiative to establish a revolving loans fund aimed at financing small and medium scale farmers and producers--affirming their willingness to contribute and extend an invitation to Arab, regional and international financial institutions to support the fund. Participants also emphasized the importance of the Arab Authority and the other parties’ experience in taking part in the webinar, exploring the possibility of benefitting from expanding and spreading the fund across all Arab countries. The experience comes as an integrated model that looks towards helping reduce the risks in financing small farmers and achieve the desired goals of increasing production and productivity.

The webinar resulted in a package of important recommendations like the necessity of providing and sustaining support to the small farmers and producers' sector; creation of the appropriate environment by providing the necessary infrastructure; strengthening the role of relevant institutions and focusing on building and developing technical, financial and administrative capacities for small farmers and producers, especially the youth and rural women.

Participants called on the Arab governments to draft and implement legislation and policies to provide an appropriate environment that can attract the private sector to actively take part in financing small farmers. They also urged companies to join the fund.

H.E. Mohammed Al Mazrooei, President, AAAID, said, “The Arab Authority has accomplished a lot to achieve the goals for which it was created. We confirm its continuous endeavors to contribute to enhancing Arab food security through its agricultural investments in various sectors and its development programs aimed to benefit of small and medium farmers and producers who constitute the largest segment in the Arab countries by about 80 per cent.”

H.E. also pointed out that in 2013, the AAAID succeeded in expanding its activities with the creation of a revolving loan programs, which achieved encouraging results. Most notably the total cumulative financing reaching about USD 22.4 million between 2013 and 2019, recording an annual growth rate of about 64 per cent. With net profits of about USD 1.5 million in the Republic of Sudan, the Islamic Republic of Mauritania, Jordan and Comoros, indicating that the total number of beneficiaries reached more than 151.2 thousand.

H.E. added, “The Arab Authority's projects have adopted the contractual agriculture mechanism with smallholders and small breeders in the Arab countries. The successes and achievements of AAAID in both the revolving loans programs and the contractual agriculture constituted a strong motivation for us to establish a revolving loan fund. In addition to inviting all the funding and financial institutions concerned with development in the Arab countries to contribute to the fund’s capital, in a way that serves our ambitious aspirations.”

Meanwhile, Dr. Sidi Ould Tah, Director General, Arab Bank for Economic Development in Africa (BADEA), said, “We are looking forward to working closely with AAAID and achieve new success stories in the sub-Saharan Africa. We appreciate the Authority’s efforts to employ its pioneering experience, especially in the field of revolving loans funds programs and contractual agriculture, which serve the economic and social development plans in Africa.”

Dr. Dina Saleh, Regional Director MENA, International Fund for Agricultural Development (IFAD) said, “The International Fund places key emphasis on investing in promoting rural finance to improve the livelihoods of small producers and farmers across rural areas, especially for the youth and women sector. We remain confident in the move that seeks to unite the efforts between the international fund and AAAID, which will represent an advanced step on the road to enhancing small farmers' access to rural finance, by enhancing knowledge exchange and directing resources to promote innovative rural financial products--falling in line with the framework of effective partnership with governments and financial institutions in the Arab world.”

AAAID's virtual webinar saw valuable presentations made by keynote speakers coming from major regional and international institutions and organizations that adopt programs and activities for the benefit of small and medium scale farmers and producers. Participating entities included the Arab Bank for Economic Development in Africa (BADEA), the Islamic Development Bank Group (IsDB), the International Fund for Agricultural Development (IFAD), the Arab Organization for Agricultural Development (AOAD), Asian Infrastructure Investment Bank (AIIB) and Arab Gulf Program for Development (AGFUND), as well as CEOs and directors of leading and active banks and microfinance establishments that provided informative input on their operations and challenges in supporting small farmers.