Press release No.: IFAD/14/09

Rome, 23 February 2009 − A US$14.4 million loan from IFAD will help finance the Project for Strengthening Assets, Markets and Rural Development Policies in the Northern Highlands, where some of Peru’s poorest people live.

The loan agreement was signed today in Rome by Carlos Roca Cáceres, Ambassador of the Republic of Peru to Italy, and Lennart Båge, IFAD President.

Nearly nine out of ten poor rural people in Peru live in the arid Andean highlands. By identifying and strengthening the assets of farmers and communities the project will reduce poverty among the rural population in Sierra Norte, where production of basic food crops is at a subsistence level. The project will increase and add value to the human, social, natural, physical and financial assets of poor rural people, small-scale producers and entrepreneurs, particularly women and young people. About 20,000 families in Peru will benefit from the project.

As a first step towards developing new business ventures, the project participants will identify and map their assets and those of their communities.

The project will support them in contracting the services they need for their small businesses and encourage the involvement of rural women, by helping them set up savings accounts. Micro insurance will be provided for the poorest of the participants.

The total cost of the project is estimated at US$21.9 million over a period of five years. The main sources of financing are IFAD, Action Aid Spain, the National Government of Peru, the Regional Government of Lambayeque, local governments and the beneficiaries themselves.

To date IFAD has funded 8 rural development projects in Peru for a total of US$115.4 million.

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IFAD was created 30 years ago to tackle rural poverty, a key consequence of the droughts and famines of the early 1970s. Since 1978, IFAD has invested more than US$10.6 billion in low-interest loans and grants that have helped approximately 350  million very poor rural women and men increase their incomes and provide for their families. IFAD is an international financial institution and a specialized United Nations agency. It is a global partnership of OECD, OPEC and other developing countries. Today, IFAD supports close to 250 programmes and projects in 87 developing countries and one territory.