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Mexico invests in agricultural, inclusive and sustainable development with IDB support

The National Financial for Agricultural, Rural, Forestry and Fisheries Development will promote technological innovation projects with an impact on productivity and environmental sustainability, facilitating access to financing for the country's small and medium production units

The Inter-American Development Bank (IDB) approved a conditional credit line for investment projects (CCLIP) and a first program under this credit line, in order to increase the productivity of the agricultural sector, rural financial inclusion and environmental sustainability and climate resilience in Mexico. This program will be executed by the National Financial of Agricultural, Rural, Forestry and Fisheries Development (FND).

The operation will offer greater access to financing for Rural Economic Units (REU) with projects that support greater investment in the field and environmental sustainability.

The program will focus on small and medium-sized REUs that develop productive activities in the primary and agro-industrial sector, as well as other economic activities linked to the rural sector. It is expected to promote technological innovation projects, where there are opportunities for optimization of production along the agricultural value chain.

In addition, priority will be given to financial inclusion, with emphasis on supporting REU in municipalities or areas characterized as high and very high marginalization, such as the southern and southeastern region of Mexico.

To contribute to sustainable development and address vulnerability to climate change, projects that reduce pressure on natural resources will be invested through greater efficiency and productivity in the use of water, energy and land use, as well as others that contribute to reduce the emission of greenhouse gases and vulnerability to climate change, and carbon sequestration.

As part of the program, a new FND line of credit will be financed for the management of counterparty risks of rural financial intermediaries to support the financing of investments in the agricultural and rural sector. This risk management instrument helps solve the general problem of financing small and medium-sized productive units with difficulties in providing enough guarantees.

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The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.