NMB Foundation reaps rewards after 12 Years with Rabo Foundation

Cooperatives help build sustainable communities in rural areas. This is because, when farmers join forces, they become collectively able to build a sustainable commercial and agricultural model that benefits everyone, and first and foremost the cooperative members themselves. Alongside the collective benefits of being in a cooperative, working with other farmers strengthens the individual position of each member. If you collect milk together, for instance, you can get a better price for it. If you are united in a cooperative, you can get a loan together and you can share knowledge and resources.

These benefits were still broadly unknown to the millions of smallholder farmers in Tanzania. Over the past 12 years, however, NFAD has been able to guide many of them. Directly or indirectly, NFAD has supported more than 500,000 farmers. They are now united in cooperatives or in the process of doing so.

NFAD was established in 2012 by the then still small Tanzanian NMB Bank and Rabo Foundation. The two entities collaborated to increase the livelihood of smallholder farmers in Tanzania. Together, they formed a strong partnership that to-date is regarded as one among the leading advocates for cooperatives in rural Tanzania. Under the NFAD, the partnership was able to promote understanding and sustainable growth of the cooperative form of business through knowledge transfer and trainings on good governance, financial literacy and production techniques.

‘Knowledge transfer and skills sharing is vital for promoting farmers’ success. It’s one thing for a farmer to join a cooperative, but what does that mean and how does it work? That’s why training on good governance and financial literacy are very important,’ explains Ivar Heine. He is Operations Manager at Rabo Foundation and in that capacity joined the board of NFAD in recent years.

‘Back then, we financed NFAD’s knowledge transfer activities, enabling them to further develop their training facilities and offer training to members – from fruit growers to livestock farmers. In addition, we connected NFAD with other parties in our network to exchange knowledge. And for their part, they introduced us to cooperatives in need of finance.’

How does NFAD set about its work? ‘Many farmers in Tanzania already work together, but usually in groups of no more than a few dozen. And without any official contractual agreements. Ivar: ‘They have often not heard of cooperatives before. NFAD uses successful examples to show them that this way of working together has many advantages. And trains them in good governance – being able to run a cooperative well – and financial literacy. NFAD helps farmers open bank accounts with NMB Bank, for instance, which is the first step in building up a financial track record that will provide access to finance.’

‘It’s unbelievable how many farmers NFAD has managed to reach and support to working together in sustainable, fundable cooperative model,’ says Ivar. ‘The great successes we have achieved under the framework of our 12 years’ joint partnership with NMB Bank, have laid the necessary foundation for the creation of today’s NMB Foundation. The capacity building, and technical assistance given to NMB during the duration of our partnership are critical in advancing the mission forward.’

‘We are very proud of our remarkable achievements and milestones. While Rabo Foundation no longer maintains a board seat under the current governance framework of NMB Foundation, we work even more intensively together to support cooperatives in their financing needs.’

This switch of board member is particularly timely. Ivar explains: ‘NMB Bank has grown tremendously over the past years. The bank has successfully transformed from a small bank, into a market leader with extensive capabilities in the Agriculture business space, with a particularly focus on smallholder farmers. Since they see saw the additional importance of NFAD from this position, it was a logical step for them to take up the board seat. Thus NFAD’s successor, NMB Foundation, is now completely in local hands.’

The NMB Foundation will continue with the same team with a sharpened strategy. In addition to training farmers on good governance and financial literacy, the Foundation also focuses on environmental conservation, innovation and entrepreneurship. Furthermore, in the communities where they are active, the Foundation will work to promote better education and health. ‘ With the introduction of NMB Foundation, NMB will deepen its strategic commitment of championing socio-economic prosperity for low-income people in Tanzania, especially smallholders farmers’. Stated, Ms. Ruth Zaipuna, CEO NMB Bank Plc. (in the center of the photo).

Ivar (left on the photo): ‘We are proud to be one of the founders of this Tanzanian foundation and very excited to remain involved on a project basis. For example, in financing cooperatives that do a lot in terms of our own goals such as climate-smart agriculture. In this way, we continue to support Tanzanian farmers in the improvement of their lives and the lives of others in their communities.’