The Inter-American Development Bank today announced the approval of a $60 million soft loan to Nicaragua to help raise the incomes of poor rural families through a comprehensive program of assistance.
The resources will enable the Rural Development Institute to introduce specialized technologies to diversify production and to provide technical and managerial training in product marketing, promotion of environmentally sustainable productive practices, and reduction of the risk of damage from drought.
The program is expected to benefit 35,000 low-income families directly and 180,000 indirectly, in 120 municipalities nationwide, including the North Atlantic and South Atlantic autonomous regions, areas with large numbers of rural poor, Afro-Nicaraguans and indigenous communities. Investment projects will be financed for comprehensive proposals designed to provide basic support and resources to transform production through technical assistance and the organization of producers.
Financing will be provided for production-related infrastructure, technical assistance and services, and for the promotion of participatory processes to insure that the potential beneficiaries have the necessary information to gain access to resources of the program. Municipal development committees will receive support in identifying projects and assigning them a priority.
The program will strengthen the Rural Development Institute (IDR)* in its environmental and accounting management capability, and it will support the Ministry of Agriculture and Forestry in the preparation of a strategy and action plan for rural productive development in the country and for a regional agricultural development study of the North Atlantic and South Atlantic autonomous regions.
The ministry will also be assisted in modernizing its price information system, its management capacity to reduce drought-related damage, and in the design of mechanisms to supply rural financial services.
The program reflects the Bank’s objectives of poverty reduction and rural development through a comprehensive strategy of investments in infrastructure and human resources, achieving greater efficiencies and productivity, as well as environmental protection. It reflects lessons learned from previous investments in the agricultural sector by placing greater emphasis on technical assistance, participation, and gender equity.
The total cost of the project is $68 million. The IDB loan is for a 40-year term, with a 10-year grace period, at an annual interest rate of 1 percent during the grace period and 2 percent thereafter. Local counterpart funds total $8 million.