Press release number: IFAD 14/06

Rome, 21 February 2006 - A new development programme will help rural family entrepreneurs in the Republic of Moldova gain access to financial services so they can boost their incomes. The programme will also create new enterprises and expand existing ones to increase employment opportunities.

The US$20.3 million Rural Business Development Programme will be financed by a US$13 million loan from the International Fund for Agricultural Development (IFAD). The loan agreement was signed today at IFAD headquarters in Rome by the President of IFAD, Lennart Båge, and, the Ambassador of the Republic of Moldova to IFAD, Nicolae Dudau.

The five-year programme will help create new markets and jobs in the country's rural areas, and enable poor farmers to move into more productive farm and non-farm activities.

It will facilitate access to medium and long-term financing and capital loans so people can invest in agriculture and off-farm projects. Business support and development services will also be available to improve business efficiency. IFAD's experience in the Republic of Moldova has shown that there is a great demand for rural financial services.

The agricultural sector, including production and food processing, employs about 40 per cent of the country's labour force. But production levels are currently less than half of what they were before the break-up of the Soviet Union in 1991.

The new programme incorporates innovative features such as an investment/business support package, which lessens the risks for both lenders and borrowers.

Another important innovative approach mainstreamed in the programme is the public-private partnership. It will provide medium and long-term financing for small and medium-sized enterprises, along with access to private capital in support of national development objectives. This approach will increase synergy and improve the programme's impact on poverty.

With this loan, IFAD will have financed three investment programmes in the Republic of Moldova for a total loan portfolio of US$35.5 million.

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IFAD is a specialized agency of the United Nations dedicated to eradicating poverty and hunger in rural areas of developing countries. Through low-interest loans and grants, it develops and finances projects that enable rural poor people to overcome poverty themselves. There are 185 ongoing IFAD-supported rural poverty eradication programmes and projects, totalling US$6.1 billion. IFAD has invested nearly US$2.9 billion in these initiatives. Cofinancing has been provided by governments, beneficiaries, multilateral and bilateral donors and other partners. At full development, these programmes will help nearly 80 million rural poor women and men to achieve better lives for themselves and their families. Since starting operations in 1978, IFAD has invested almost US$9.0 billion in 707 programmes and projects that have helped nearly 300 million poor rural men and women achieve better lives for themselves and their families. Governments and other financing sources in the recipient countries, including project participants, have contributed almost US$8.8 billion, and multilateral, bilateral and other donors have provided another US$7.0 billion in cofinancing.