The International Finance Corporation (IFC) and the BNP Paribas (Suisse) SA, on April 2, 2012 launched a $100 million risk-sharing facility that will improve access to finance for the agricultural sector in sub-Saharan Africa and Eastern Europe.
The programme will enable the increased production of export commodities including cashews, cocoa, and coffee to spur trade and economic development in low-income countries, according to the IFC.It will also help boost the availability of critical cereals like corn, rice, and wheat to promote local food security.
?The facility will provide $100 million for up to three years to support the financing needs of agricultural firms through the IFC Global Warehouse Finance Programme. IFC and BNP Paribas will partner to provide borrowers with short-term loans against the value of their produce, using warehouse receipts or similar stock-financing instruments,? the IFC said in a statement.
The IFC started the Global Warehouse Finance Programme in 2010 to increase working-capital financing for farmers, traders, and exporters in emerging markets, by leveraging their own production.
The programme is expected to reach up to 208,600 farmers across emerging markets in all regions and contribute to food availability for 7.5 million people by 2014.
By Ekow Quandzie