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Young man sorts produce at a warehouse in Tonga

Private sector

35%
of the world’s food produced on small farms
+4.2 million
people targeted by IFAD private-sector investments
US$ 5
leveraged from the private sector for every $1 of IFAD investment 
© IFAD/Todd Marvel Henry
The private sector drives entrepreneurship, employment and growth in rural economies, and is essential to eradicating poverty and hunger. 

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Context

Small-scale farmers produce about a third of the world’s food. Food production is critical for their own food security and nutrition, in addition to supplying their communities and nations. Yet many rural people lack access to the markets, services and financing they need to sustainably grow their businesses. Millions of young rural people enter the job market each year only to find few opportunities, 

As official development aid for agriculture stagnates these gaps can only be closed with the support of the private sector.  

While private investors increasingly recognize the urgent need, many still lack the expertise and capacity to engage effectively with small-scale farmers and rural businesses. Investors are often discouraged by the perceived high risk, small investment sizes and high transaction costs. 

Opportunities

The private sector is more than just a crucial source of capital. It also brings unique technical expertise, innovative solutions and market-driven dynamism. Private investment is essential for initiatives both targeted and broad, from lending to rural businesses to developing value chains and expanding financial access in rural areas. 

With deep understanding of the agriculture sector and rural communities, it is possible to bridge the existing gap between small-scale rural producers and the private sector, and unlock the development of vibrant, resilient rural economies.  

What IFAD does

  • IFAD has expanded its capacity to assemble, leverage and deliver resources to build rural livelihoods and resilience through private-sector investment. Our support enables rural people to enhance their productive capacities, access markets and finance, and engage with the private sector. 

  • As one of the world’s largest multilateral investors in food and agriculture, and guided by our Private Sector Engagement Strategy, we channel capital into small-scale rural enterprises. At the same time, we expand markets and increasing incomes and jobs for rural people. 

  • We provide financing directly to private enterprises to catalyse sustainable rural resilience and livelihoods. Our Private Sector Financing Programme offers financial interventions with high impact potential, alongside technical assistance and coordination with public sector partners. 

  • Our innovative public-private-producers partnership (4P) model enables small-scale producers to develop more stable business relationships and access new markets, while private-sector companies secure reliable sources of quality raw materials. The private-sector partners in this model range from small domestic businesses, like dealers and agro-processors, to international corporations like food manufacturers and supermarket chains.  

  • The Agri-Business Capital Fund is IFAD’s first sponsored large-scale blended finance platform. This provides loans and equity investments that are adapted to the needs of rural businesses, farmers’ organizations, entrepreneurs and financial institutions. 

  • The Africa Rural Climate Adaptation Finance Mechanism (ARCAFIM) is a large-scale non-sovereign operation to support climate adaptation in rural communities in Kenya, Rwanda, Tanzania and Uganda. 

  • As hosts of the SAFIN network, we connect agri-businesses, lenders and other actors to make access to rural finance more efficient and inclusive. 

Experts

James Marc de Sousa-Shields

Lead Regional Technical Specialist, Rural Finance, Markets and Value Chains

[email protected]
Gene Moses

Senior Partnership Officer, Private Sector and Foundations

[email protected] See bio
Francisco Rubio

Senior Technical Specialist, ABC Fund

[email protected]
Lei Han

Country Programme Analyst, Asia and the Pacific

[email protected]

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