Solidaridad opens trust fund for rural development

30 August 2016

Solidaridad and IDH are supporting a trust fund for inclusive rural development to provide at least 5,000 rural families in Paraguay with access to adequate financial resources, technology transfer (both productive and environmentally friendly) and market access over a 10-year period.

One of the main obstacles for smallholders to stay in business is access to finance. This is even more difficult for indigenous communities.

With this in mind, Solidaridad, along with support from IDH, Syngenta, Desarrollo Agrícola del Paraguay (DAP), Paraguayan Agricultural Corporation (PAYCO – a joint venture between the Portuguese Espirito Santo Group and the German Bank for Development KFW), Noble Paraguay (International Grains Trade) and partner CSO Fundación Moisés Bertoni, structured a combined seed capital of €840,000 euros to create a revolving fund. The Fidei Trust developed two financial lines:

  • A revolving fund, which is refundable and finances production resources needed for land preparation, such as machines and technology for cropping, agricultural inputs and pesticides, certified seeds;
  • A social non-refundable fund that facilitates access to training on Good Agriculture Practices (GAPs), technical advice on specialty crops, first aid services, road improvement, school support, legal and administrative assistance, training in cooperative administration and commercialization development.

It is the refundable component of the trust that ensures the maintenance of the social fund and its long-term impact.

Fidei Trust Fund: How the fund works (Infographic - PDF)

Since its approval in May 2014, the Fidei Trust has implemented 10 projects and reached 1,160 small farmer families. Farmers support the proposal with in-kind co-funding and must use all of the resources locally in accordance with the full execution of the project proposal.