Incofin will provide through the Technical Assistance Facility of the agRIF fund (agTAF) and the Smallholder Safety Net Upscaling Programme (SSNUP), technical assistance (TA) to support Huimin in reinforcing its internal capabilities and strengthening its strategic and financial performance, thus contributing to the increase in financial inclusion among female smallholder farmers in rural China.
In the Chinese zodiac today is the beginning of the Year of the Ox. The ox is a valued animal in Chinese culture because it plays an important role in agriculture and is recognised through its hard work, intelligence and honesty. Incofin understands the importance and the needs of the agriculture sector and sees a valuable role for female smallholder farmers. Women produce more than half of the world’s food. Women reinvest up to 90% of their earnings back into their households. This money is often spent on nutrition, healthcare, school and income generating activities which helps to break the cycle of poverty.
Supporting female farmers in Ningxia, one of the poorest regions in China has been the mission of the Chinese microfinance institution Huimin since the beginning. Today, Huimin maintains one of the smallest average loan sizes in China of only USD 3,500, about one-third of the country’s GNI per capita. It has the deepest rural outreach in China, serving over 14,000 clients, all of whom are rural residents.
As a new shareholder that invested USD 2.1 million equity in Huimin at the end of last year, Incofin wants to support the company in scaling its outreach to female smallholder farmers in Ningxia. Incofin goes now a step further: through technical assistance and governance support Incofin will help Huimin adopt the global best practices in microfinance. TA is an important part of Incofin’s “Capital Plus” approach which helps to maximize the potential of Incofin’s portfolio companies to generate positive outcomes for their clients. Debt fundraising, financial management, governance enhancement and risk management coupled with the delivery of technical support to farmers are the identified priority areas to prepare Huimin for future growth. These areas are part of a broader value creation plan for Huimin, which also includes product development and digitalisation.
Incofin’s TA-project, co-financed by agTAF, SSNUP and Huimin itself, will help to reinforce Huimin’s internal capacities and to strengthen its strategic and financial performance, governance, risk management and internal audit. In addition, it will support the provision of agricultural advice to the farmers, which is considered as one of Huimin’s key strengths. This project will become essential in preparing the company for the next step on its journey towards a more inclusive financial landscape for female farmers in Ningxia. It will make Huimin more attractive for foreign debt investors which will catalyse the growth and resilience of the agricultural sector in China.
About the Technical Assistance Facility of the agRIF fund (agTAF)
agTAF, the Technical Assistance Facility of the agRIF fund, was launched in 2018 to foster the financial inclusion of smallholder farmers and rural entrepreneurs through the provision of tailored capacity building support to selected investees of the Fund. agTAF is a EUR 2 million facility jointly financed by the European Investment Bank (EIB), under the investment facility established pursuant to the ACP-EU Partnership Agreement, concluded on 23th June 2000 between the members of the African, Caribbean and Pacific Group of States and the European Community and its Member States as amended from time to time, the Société de Promotion et de Participation pour la Coopération Economique S.A. (PROPARCO), the Belgian Investment Company for Developing Countries (BIO) and the agRIF fund.
About the Smallholder Safety Net Upscaling Programme (SSNUP)
The Smallholder Safety Net Up-Scaling Programme (SSNUP) is a 10-year plus programme which aims at leveraging the well-established agricultural markets knowledge of Technical Assistance Facilities of selected agricultural and rural microfinance SSNUP investors. The aim of SSNUP is to strengthen sustainably the safety nets of 10 million smallholder households resulting in an improved well-being of altogether 50 million low-income and highly vulnerable people through a systemic agricultural value chain development approach. It will fund technical assistance projects that support agricultural value chain aggregators in developing, testing, and up-scaling tailor-made agricultural financial and non-financial farm risk mitigation and extension services that increase the safety nets of million smallholder households.