LILONGWE-(MaraviPost)-President Lazarus Chakwera has expressed satisfaction over the launch of the International Fund for Agricultural Development (IFAD)’s Blended Rural Financing Facility (BRFF) which over two million Malawians will benefit.
The facility is under the Financial Access for Rural Markets, Smallholders and Enterprises (FARMSE) programme.
Addressing High-Level engagements with IFAD leadership after the launch at Kamuzu Palace on Friday, March 28, 2025, President Chakwera welcomes IFAD’s continued partnership and support in fostering economic growth and financial inclusion for rural communities.
“The launch of the BRFF marks a significant milestone in strengthening Malawi’s rural economy through sustainable financial interventions.
“The launch of the BRFF underscores the government’s commitment to sustainable rural financial development, in line with Malawi 2063’s aspirations for economic transformation through inclusive growth and financial resilience,” lauds Chakwera.
In her remarks, IFAD’s Regional Director for East and Southern Africa, Sara Mbago-Bhunu upon paid a courtesy call on the Malawi leader said, “The BRFF as a catalytic instrument for achieving Malawi 2063’s goals and the emerging development aid architecture that prioritises sustainable financial mechanisms.
“IFAD’s financial position in light of global economic uncertainties, including policy shifts under the new Trump administration and IFAD’s resource mobilisation strategy for continued partnership with Malawi”.
According to the initiative’ brief, this innovative financing mechanism represents a strategic shift from traditional grant-based support to a self-sustaining revolving fund aimed at strengthening rural financial inclusion in Malawi.
The BRFF will deploy USD 24 million from IFAD’s existing FARMSE financing and is expected to leverage additional funding from private banks and microfinance institutions (MFIs) at a ratio of 2.5 times, bringing the total facility to USD 60 million.
“The fund will serve as a de-risking instrument, incentivising financial institutions to unlock their own resources as co-investment, ensuring the sustainability of rural financial support well beyond the lifespan of FARMSE.
“Initial projections estimate that the facility will reach 2 million direct beneficiaries across Malawi,” reads the brief in part.
It adds, “Additionally, 100 Savings and Credit Cooperatives (SACCOs) and 50 MFIs will receive support under the fund.
“A private sector fund manager under the oversight of the Government of Malawi, to ensure accountability and long-term viability, will commercially manage the facility”.
According to the brief, Malawi government gains from the BRFF including establishment of a self-sustaining fund owned by the Government and people of Malawi, expected to grow to US$60 million within five years.
“Retention of the initial USD 24 million principal capital from IFAD as a long-term development resource.
Generation of proceeds from interest gained as the fund continues to revolve.
“Expanded financial outreach to rural areas, with 50% of the fund supporting the agriculture sector and the remaining 50% dedicated to micro, small and enterprise development”, adds the IFAD brief.
An update on IFAD’s ongoing investments in Malawi’s agriculture sector, which currently amount to US$ 450 Million, as well as the IFAD 13 allocation of US$ 37.7 million in new funding for commercial aquaculture and livestock development for local consumption and export.