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The Zambian government has signed a US$26 million loan agreement with the International Fund for Agricultural Development (IFAD) in a bid to provide rural financial services to small-holder farmers

Zambia-farmers-wateringcrops Small-holder farmers in Zambia will benefit from a loan deal entered by the Zambian government and IFAD. (Image source: Bread for the World)

The Zambia rural finance expansion scheme will receive support from IFAD through a loan of US$10.8mn and funding from the Zambian government.

The new agreement was recently set-up by finance minister Alexander Chikwanda and IFAD president Kanayo Nwanze.

Nwanze stated that investments will be promoted by improving and diversifying rural financial services.

"Currently only about 37 per cent of the adult population use financial services, and only 14 per cent of them have bank accounts," Nwanze said.

According to the IFAD president, the programme will be managed by the Ministry of Finance through its Investment and Debt Management Department.

"In addition, it aims to enhance the capacity of financial service providers to deliver demand-driven services in rural areas and this will help increase in the number of adults using financial services, and reduce the cost of borrowing," Nwanze added.