ROME (Thomson Reuters Foundation) - A new United Nations-led multi-million dollar investment fund is targeting young farmers and agribusiness owners, whose struggle to access loans threatens food production and global goals to end hunger, particularly in Africa.
The Agribusiness Capital (ABC) Fund will begin operations in early 2019 and provide loans of between $100,000 to $1 million, said Gilbert F. Houngbo, president of the International Fund for Agricultural Development (IFAD).
“This targets the missing middle - who cannot access this kind of money from banks or commercial institutions and are not served either by micro-credit,” he told the Thomson Reuters Foundation by email.
“(The Fund) will make loans directly to small and medium-sized Enterprises (SMEs), farmers’ organisations and ‘agripreneurs’,” he added.
IFAD is a U.N. agency that works with small-scale producers to improve incomes and reduce hunger through grants and low-interest loans.
At least 50 percent of loans from the ABC Fund would be in Africa, said Alvaro Lario, IFAD’s associate vice-president.
Africa has the world’s youngest population - 60 percent of its 1.2 billion people are under 25 - but only 3 million jobs are created for some 12 million young people who enter the workforce each year, the African Development Bank says.
The continent already spends $35 billion a year on importing food for its growing population despite having 65 percent of the world’s uncultivated arable land, making it crucial to keep young Africans in agriculture.
Yet many see farming as an unattractive, and are deserting it to find work in cities or abroad.
The Food and Agriculture Organization has said approximately 65 to 75 percent of people migrating from Africa are youth in search of employment opportunities.
Meanwhile, more than 70 percent of young farmers say access to finance is the main obstacle they face, according to IFAD.
Reporting By Thin Lei Win @thinink, Editing by Ros RussellPlease credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, corruption and climate change. Visit www.trust.org