The International Fund for Agricultural Development (IFAD), Bank of Kigali and Aceli Africa have partnered to strengthen agricultural financing in Rwanda through a new agreement aimed at improving access to finance for farmers’ organisations and smallholder farmers.

The partnership, signed on Friday, September 4 at Africa Food Systems Forum 2026, is expected to support increased productivity, resilience and inclusive growth across the country’s agricultural sector.

The agreement will support the Farmers’ Organizations Financing Programme – Rwanda (FOFP-R), a blended finance initiative mobilising a total of $21 million. The financing comprises $12 million from IFAD and an additional $9 million in co-financing from Bank of Kigali.

The initiative is expected to strengthen approximately 215 farmers’ organisations, provide financing to around 172 of them and benefit more than 35,000 smallholder farmers, particularly women and youth.

The beneficiaries will be supported across key agricultural value chains, including maize, rice, cassava, dairy and horticulture.

"The significance of Farmers' Organizations Financing Programme – Rwanda represents a broader shift towards innovative financing solutions. Innovation goes beyond technology; it is also about finance, institutions, partnerships and entrepreneurship,” said IFAD Vice-President, Gérardine Mukeshimana.

"FOFP-R is expected to reduce risk, attract additional investment and expand opportunities for rural entrepreneurs, farmers' organisations and small-scale producers.”

Addressing financing gaps

Agriculture employs more than half of Rwanda’s population and contributes approximately around 20 per cent of the country’s GDP, according to the National Institute of Statistics of Rwanda.

Despite its importance to livelihoods and the country’s economy, access to finance remains a major constraint for the sector, with agricultural lending accounting for only a small share of total credit in Rwanda – only about 1.3 per cent of total bank lending in 2025, pointing to the limited access to tailored financial solutions, according to the National Bank of Rwanda.

Farmers’ organisations play a key role in aggregating production, facilitating access to inputs and markets, and connecting farmers to financial services.

However, while the number of farmers’ organisations in Rwanda has grown steadily in recent years, around 70 per cent of their financing needs remain unmet.

The financing gap is attributed to challenges including weak governance, limited collateral, inadequate financial records and low financial literacy. These challenges, in turn, increase lenders’ perception of risk when dealing with farmers’ organisations.

Bank of Kigali Chief Executive Officer Diane Karusisi said the partnership would help address some of the longstanding barriers preventing farmers’ organisations from accessing traditional financing, despite such entities being important to backbone of Rwanda's agricultural output.

"Through this partnership with IFAD, Bank of Kigali is bringing innovative, inclusive financing solutions to the people who need them most combining capital with the technical support these organizations need to strengthen their governance and financial systems,” she said.

"This is what innovation in banking should look like: not just new products, but new ways of reaching the farmers who power Rwanda's economy,” she added.

The partnership package  

IFAD’s $12 million financing package comprises a $9 million loan, a $1.8 million grant for risk sharing and a $1.2 million technical assistance grant.

The technical assistance will support farmers’ organisations in strengthening their governance, financial management and digital capacity.

It will also help Bank of Kigali develop the tools and expertise required to serve farmers’ organisations sustainably.

The initiative also benefitted from a $6 million allocation to IFAD from the Business Investment Financing Track (BIFT), a financing tool of the Global Agriculture and Food Security Program (GAFSP).

BIFT provides multilateral development finance institutions with access to flexible grant and concessional finance to implement financial innovations addressing the unique investment needs of smallholder farmers and early-stage micro-, small- and medium-sized agribusinesses in low-income countries.

GAFSP Head Shobha Shetty said the financing mechanism would help create more inclusive capital markets in Rwanda and enable vulnerable groups in the agri-food sector to make long-term investments.

"This innovative finance solution offered by the BIFT will support more inclusive capital markets in Rwanda to help the most vulnerable working in the agri-food sector – including smallholder farmers, women, and youth – make transformative investments for their future,” Shetty said.