Warning: Creating default object from empty value in /afs/ir.stanford.edu/group/womenscourage/cgi-bin/blogs/wpmu-settings.php on line 45
Despite its name, IFAD is no fad » Women's Courage

Despite its name, IFAD is no fad

February 24th, 2011 by ktwebb Leave a reply »

Before I begin this week’s post, I’d like to provide an update on my microfinance project—this past week, I got my first repayment on my microfinance investment through Kiva.org. Of my $25 invested, I so far have recouped $3.12 from the Let’s Unite Group, which aims to increase the production capacity of a rural bakery in Sierra Leone. I’m excited to re-invest it, but I think I’ll wait til I’ve recouped more of the investment before helping someone else. I wish Kiva would provide status updates—I think it’d be more rewarding and satisfying to know if the borrowers are faring better off now. As for MicroPlace, the for-profit alternative, it seems as though I will not see any return until September, so further updates are unlikely.

For this week’s topic, I want to address how microfinance could potentially help to support small farmers in Africa. This past week, former UN leader Kofi Annan claimed that with aid, Africa could feed the world’s farmers. With the help of the UN’s International Fund for Agricultural Development (IFAD), small African farmers have already been helped—“partnerships involving IFAD and AGRA have leveraged US$160 million in affordable loans to agriculture from commercial banks in Ghana, Kenya, Mozambique, Uganda and the United Republic of Tanzania.” (http://www.reliefweb.int/rw/rwb.nsf/db900sid/KHII-8EA5VF?OpenDocument)

More relevant for the subject of this blog, of IFAD’s microfinance portfolio (as agriculture is investment-intensive, holding an exclusively microfinance portfolio would in many places be an ineffective strategy) 80% has been loaned to women. In African nations, these small, low-interest loans seem particularly poised for success, as small agriculture has long been the pattern in many nations, and women have long played a crucial role in raising plants. Through IFAD’s loans, it is conceivable that more countries could start to shake some of their dependence on foreign crops, that they could help to curb issues of hunger, all while simultaneously giving rural citizens the ability to empower themselves. And by charging a small interest rate, the impact of IFAD stands to grow with time. And although countries continue to have issues with loan defaults (take a look at http://allafrica.com/stories/201102240919.html for a discussion of Rwanda’s incredibly low rate of repayment), I still remain optimistic that ethically minded organizations like IFAD can effect some valuable change.

Advertisement

3 comments

  1. adakulen says:

    Yikes! Apologies, Kevin! :)

  2. ktwebb says:

    Ada,

    This is Kevin, not Katie. But thank you for the nice comments!

    -Kevin

  3. adakulen says:

    Hey Katie! I want to applaud your posts (and your idea to test drive the microfinance investment deal) as you have convinced me to do some investment research of my own. $25 really is not that much for me in the grand scheme, and I’d love to see someone put it to work in an innovative way somewhere where that amount has more clout than a movie ticket and a tub of popcorn, which is about its worth here, and about how much we throw down on any given Friday. Actually, I think it would be really cool to see some of the girls in our class test this little experiment out; we’re the perfect group to start something like this up. I’d love to be able to do a comparison of different microfinance organizations. I note one of your wishes is that you could hear what exactly is happening to your investment. I fully agree: I feel like I’d love to get a story on where the money is going and what progress is made. You do an awesome job of highlighting some projects that work (IFAD’s agriculture for women focus sounds like an awesome one) but I’d really like to really track the progress of some of these groups first hand.

    Great ideas, great post!

    Best,
    Ada

Leave a Reply

You must be logged in to post a comment.