The main objectives of the component are to create, test and widen partnerships between investors in the agricultural sector, in particular into commodities and value chains selected under the project that are necessary to be collectively implemented. Through this channel, the financial sector as well as other institutions that have intention to participate in this project or have a view to increase the volume of finance flowing into the sector, and to create sustainable and profitable models for financial service delivery to the agricultural sector, in the medium to long run, it is expected that the efficiency gains achieved under these partnership arrangements will be passed on by financial institutions to their clients, thus leading to lower interest rates.
The VCIF is a new instrument in the context of RGC-IFAD projects. As such, it is expected to generate important lessons as well directly contributing to the delivery of the AIMS development objectives. It is therefore fully expected that these VCIF Guidelines will be updated and refined from time to time during the course of AIMS implementation.
Grant sizes: grants under the VCIF shall be limited to a maximum amount of 35% of the total fixed capital investment for window 1 and 2, and 20% for window 3, and the respective absolute ceiling for the window, i.e.:
- USD 1,000 for grants under Window 1
- USD 20,000 for grants under Window 2
- USD 100,000 for grants under Window 3
Window 1: Smallholder Farmer
Only for the smallholder farmer who is member of the producer organization and business cluster. Minimum from 3 to 20 farmers per commune, and at least 4 communes and not less than 80 HHs per district.
Window 2 & 3: Micro, Small, and Medium Enterprise Investments
Only for AC, a Champion of the Inputs Seller and a Champion Buyer who is doing business with Business Cluster.