The Rural Financial Services Projects area is directly implementing two projects that are focused on rapidly addressing systemic issues related to agricultural rural financial services.

Input Voucher Sales System

The objective of the project is to improve access to input credit for smallholder farmers by making inputs available to farmers from cooperatives using a voucher system. The voucher system also addresses a critical problem of financial mismanagement by intermediaries which necessitates regional governments to cover unpaid loans to honor the 100% guarantee requirement from Commercial Bank of Ethiopia). The Input Voucher Sales system designates financial institutions such as microfinance institutions and rural savings and credit cooperatives (RuSACCOs) to handle the financial transactions during the sale of inputs in cash or credit. Farmers pay cash or sign a loan agreement at the financial institution, then obtain vouchers from the financial institution that are redeemed for inputs at a primary cooperative.

Key Targets by end of GTPII:

  • At least 9 million smallholder farmers access input vouchers
  • At least 3.5 million smallholder farmers provide access to input credit through the IVS System
  • At least 3.5 million transaction completed through eVoucher

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RuSACCO Capacity Building

This project aims to strengthen RuSACCOs in providing efficient and diversified financial services to the smallholder farmers. RuSACCOs face a major gap in liquidity, product offering, operational capability, and efficiency in savings mobilization compared to commercial banks, which the project aims to address through capacity building through application of a standardized capacity diagnostic and intervention prioritization. The project also comprises recommendations to enhance the policy and regulatory environment as well as prioritized strategic interventions.

Key Targets by end of GTPII:

  • 75 RuSACCO Union Mangers trained on ToT on capacity assessment diagnostic tools in 100 woredas
  • 75 RuSACCO unions and 750 Primary RuSACCOs supported in the implementation of diagnostic tools