Traveling in her capacity as the United Nations Secretary General’s Special Advocate for Inclusive Finance for Development (UNSGSA), Queen Maxima met with a variety of key stakeholders in Tanzania and Ethiopia. She was accompanied by WFP Executive Director Ertharin Cousin, FAO Deputy Director-General Maria Helena Semedo and Adolfo Brizzi, the Director of the Policy and Technical Advisory Division of IFAD. The purpose of the high-level visit was to highlight the importance of expanding financial inclusion in order to strengthen food security.
RBA collaboration on financial inclusion
Through P4P, the RBA agencies already collaborate with local and national governments in order to make financial services available to agricultural cooperatives and the rural poor. Both FAO and IFAD are part of P4P’s technical review panel, which is made up of independent technical experts advising P4P on implementation and strategy of the pilot. IFAD and FAO are also a part of P4P’s Access to Finance working group.
P4P enhances collaboration on financial inclusion
When smallholder farmers are enabled to access financial services, such as bank accounts, small loans, savings and insurance, they are better prepared to withstand natural disasters and to make investments which can increase their productivity and crop quality, such as inputs and better equipment. This improves farmers’ lives and livelihoods by boosting their incomes and improving food security.
In Ethiopia in 2013, WFP made its largest ever purchase from farmer’s organizations to date. Farmers’ ability to access credit was critical to facilitating this purchase, and was provided through an agreement between WFP, the Commercial Bank of Ethiopia, and cooperative unions.
In Tanzania, P4P has been working to strengthen Savings and Credit Cooperatives (SACCOs), which service smallholder farmers. These cooperatives provide smallholders with savings and credit by obtaining loans from commercial banks and on-lending to their members.
Promoting financial inclusion
The Queen, along with the RBA representatives, discussed the importance of fostering financial inclusion of rural areas, particularly that of smallholder farmers, with high ranking government officials and members of national and international financial organizations in both Ethiopia and Tanzania.
The Queen’s mission emphasized the importance of fostering the financial inclusion of marginalized groups, especially women, who often face legal and policy barriers in acquiring finance, as well as disproportionate obstacles to accessing services, training and information. These efforts, to generate awareness among governments and financial organizations about the impact of the financial inclusion of rural areas, hope to bridge a gap for small-scale farmers, who often cannot access micro-finance schemes or commercial banks.
The group also met with rural community members and smallholder farmers to discuss the ways in which farmers can use financial services to manage irregular cash flows, respond to disasters such as flood and drought, invest in equipment and inputs to improve productivity, reach markets and access insurance to mitigate risks of crop loss.