To assist countries in addressing this problem, the State of Kuwait announced an initiative, at the Forth Islamic Economic Forum held in Kuwait from 28 April to 1 May 2008, to establish the Kuwait Goodwill Fund for the Promotion of Food Security in Muslim Majority Countries, for the total amount of US$ 100 million. The Fund assists these countries in achieving food security by diversifying and increasing the productivity of agricultural products together with livestock and fishing.
The grant was distributed to 22 countries with low per capita income and high population.
The Fund works by signing grant agreements with partner countries, which then require that the receiving country open an account with a bank with expertise in financing agricultural projects approved by the Kuwait Fund, where the total amount of the grant will be deposited. To monitor the activities of the chosen bank and follow up on the financed projects, Kuwait Fund signs another agreement with the bank. The bank, in cooperation with government representatives, appraises funding applications received from the farmers. Projects qualified for financing from the Fund will be either classified as ‘small loans’ (i.e. loans not exceeding the equivalent of US$25,000) or ‘micro-credits’ (i.e. credits not exceeding the equivalent of US$3,000). Financing from the special account is provided in the form of concessional loans to be repaid with interest within an agreed time. Part of the revenues earned on the farmers’ loans repayments is spent on administration fees, while the remaining revenue is retained and added to the principal amount. Retaining the surplus in revenues and adding it to the original value of the grant provided by the State of Kuwait guarantee the sustainability of the Special Fund. For example, an agreement was signed with the Coris Bank in Burkina Faso to administer the Goodwill Fund due to its expertise in financing agricultural projects and because it has branches throughout the country, with close to 24 branches throughout the country.
As of 2013, the Fund has benefited 22 countries (Afghanistan, Bangladesh, Benin, Burkina Faso, Chad, Comoros, Djibouti, Gambia, Guinea, Guinea-Bissau, Mali, Maldives, Mauritania, Mozambique, Niger, Senegal, Sierra Leone, Somalia, Sudan, Togo, Uganda, and Yemen) for the total amount of US$100 million.
This initiative contributed to creating a large number of job opportunities in the beneficiary countries where many farmers became entrepreneurs and created new jobs. They obtained relevant knowledge and expertise through training provided by the Ministry of Agriculture in their respective countries. It also secured a decent source of income for numerous families and improved their standards of living, especially women. More importantly, it assisted in enhancing food security in the beneficiary countries, minimized the impact of fluctuations in food prices, reduced imports and saved foreign currency. This has had a significant positive impact on the current account and the balance of payments of beneficiary countries. For example, a group of women in Guinea-Bissau took out a loan from the Goodwill Fund and created a partnership to fish, freeze and market their catch. This required employing a number of workers to assist in fishing as well as transporting, freezing, storing and marketing fish, which provided income for all those working on this project. In addition, the project promotes food security. Furthermore, women in charge of this project stated that the project contributed to their empowerment and provided them with the necessary income to educate their children and offer them good healthcare.
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