Strengthening Agricultural Finance in Ethiopia (SAFE) Ethiopia is a country located in the Horn of Africa between 30 N and 150 N latitude and 330 E and 48) E longitude and has a land mass of 1.1 million square kilometers, which makes it the 10th largest country in the continent. It is a landlocked country that shares boundaries with six countries, Eritrea to the north, Djibouti and Somalia to the east, Kenya to the south and South Sudan and Sudan to the west. Ethiopian highlands form one of the largest areas at this altitude in Africa. Ethiopia has geo-political significance as its capital city Addis Ababa is not only the seat of African Union, but also is a rising diplomatic hub hosting embassies of almost every nation in the world, various commissions and branches of the United Nations and entities of other regional and global institutions. 

Cordaid is operating in Ethiopia since 2006, focusing on thematic sectors including: Food Security and Livelihoods, Private Sector Development, Security and Justice, Health Care and Humanitarian Aid. These sectors are interlinked and are closely aligned to the Sustainable Development Goals (SDG) 1, 2, 3, 4, 5, 8, 10, 13, 16 & 17: No Poverty, Zero Hunger, Good Health & Well-being, Quality Education, Gender Equality, Decent Work and Economic Growth, Reduce Inequality, Climate Action, Peace, Justice & Strong Institutions and Partnership for the Goals.

In support of the vision of the SGD, SAFE project focused on SDG 2, 5 & 8 and tries to improve working conditions and processes of selected high value commodities and agricultural finance, particularly by mainstreaming gender and youth, promoting decent work, achieving cleaner and more sustainable production patterns and enabling the rural poor to participate in the supply chains. The main goal of the project is to improve income and gender equitable wealth creation for rural poor through sustained value chain support of selected high value commodities and strengthen agricultural finance.

The Project’s Goal reflects value chain support and agricultural finance that is central to the government of Ethiopia’s strategy for the development of smallholder agriculture through high‐value production from selected commodities. To achieve that the project will follow a full value chain development of dairy and fattening and critical support to beekeeping, fodder and seedling production and marketing. All the interventions centered in the development of value chains that produce and deliver commodities demanded by consumers at competitive prices, while giving a reasonable profit to the producer households and to the other value‐chain actors (input suppliers, traders and processors). The project target groups are youth, marginalized smallholders, producer organizations and financial services providers (MFIs and RuSACCO unions) as well as value chain actors in Amhara Region, West Gojam and Awi Zones. Many smallholders still use poor farming techniques, are only marginally integrated in markets, and have limited access to appropriate financial services . They also have limited resources for acquiring necessary farming inputs, resulting in low yields and inferior quality. Moreover, farmers are not well organized and are often forced to sell their produce at a low price. Where they are organized in producer organizations (POs), these POs often do not function very effectively.

The project aims to reach a total of 1,350 targeted project beneficiaries [60% Youth (Age 15 - 29); out of total 50% Female and 40% Non-Youth (Age > 29), marginalized smallholders; out of these 50% women] by increasing and improving access to finance and non-financial services for people living in rural areas, with a specific focus on youth and marginalized smallholder farmers. Some of the enhanced returns can come as a result of better access to information and know-how by farmers, but in many cases, access to external finance may help to unlock the people’s ability to access inputs, services and technologies needed to improve their level of competitiveness.

Women play a crucial role in balancing household demands with market production. Traditionally female presence in microfinance clientele is high. However, one can observe that the higher the loan size and the more individual loans the lower the percentage of women is. This is specifically so for rural and agricultural loans, and for rural based financial cooperatives. Therefore, the proposed project will be implemented with a gender lens in the selected value chains, through a gender specific loan product at unions of RuSACCOs and partner MFI. The project will however not exclusively target women.

The project will reach its beneficiaries through supporting MFIs and RuSACCOs, and the selected value chain system which will lead to increased access to finance and improved services for their target group. The project also supports existing and established new business service providers (BDS) to improve access to non-financial services and markets for the target project participants.