Innovatech: Project to develop technological solutions to help small farmers in Latin America and the Caribbean
The UN’s International Fund for Agricultural Development (IFAD) today launched the Innovatech project, which aims to develop digital agricultural (AgriTech) and financial (FinTech) solutions that facilitate access to financial and non-financial markets and services for smallholder farmers in Bolivia, El Salvador, Guatemala, Haiti, Honduras, and Mexico. The project will be implemented by Germany’s Sparkassenstiftung für Internationale Zusammenarbeit, an institution that focuses on financial inclusion in developing countries. Innovatech will directly benefit 9,000 households in rural areas.
The purpose of this project is to help smallholder farmers recover from the impacts of COVID-19 by providing them with quality technology solutions that will give them greater access to markets and financial and nonfinancial resources. Like other IFAD-funded initiatives, Innovatech, in line with Sparkassenstiftung’s values, will pay special attention to the most vulnerable groups, such as women and youth in rural areas and indigenous peoples.
The project will select 12 Fintech and Agritech startups to adapt their digital services to the needs of small-scale farmers in the countries of Bolivia, El Salvador, Guatemala, Haiti, Honduras, and Mexico, in order to boost financial and technological inclusion in the region and help address the problems exacerbated by the pandemic. The digital services developed will be made available to IFAD-funded project participants in the six countries. It is expected that more than 260 organizations of smallholder farmers, MSMEs, and cooperatives will benefit from increased productivity, commercialization, and financial sustainability through broader access to digital financial and non-financial services, thus meeting the goal of benefiting 9,000 households in rural areas.
Rossana Polastri, IFAD’s regional director for Latin America and the Caribbean, in her participation during the launch event, mentioned: “The COVID-19 pandemic has created a new world. Economies have gone digital and global and local food systems are following suit, so it is time for smallholder farmers to have access to new services and tools that can better connect them to this new economic environment. Only then can they move beyond subsistence and become thriving entrepreneurs, capable of securing the livelihoods of their families and communities.”
Niclaus Bergmann, CEO of Germany’s Sparkasenstiftung, expressed the importance of this joint effort: “The IFAD-funded “Innovatech” cooperation project will undoubtedly offer a great opportunity for growth, development, and innovation in the six project countries. I am pleased that the German Sparkassenstiftung can contribute to this process with its years of experience and expertise in the field of digital financial services and rural development.”..
In recent years there has been a significant increase in AgriTech and FinTech startups worldwide, but especially in Latin America. However, despite this growing number, the offer for people who are small agricultural producers is still limited, which represents a great opportunity to improve the links between the agricultural productive sector in rural areas and startups.
The Innovatech project has a startup fund of US$2.2 million that will be distributed among the 12 selected startups to carry out the necessary activities to benefit the target group with innovative solutions. Among other benefits, it will provide specialized technical assistance, monitoring throughout the implementation of the project, mentoring from industry experts on relevant topics, and access to additional financing from investment funds.
It is worth mentioning that this proposal is aligned with IFAD’s Rural Poor Stimulus Facility (RPSF) fund, established at the onset of the COVID-19 pandemic to increase the resilience of the rural poor affected by the crisis.