Rabobank and Banco Pichincha join forces to foster rural and agricultural development in Ecuador

Banco Pichincha and Rabobank have entered into a strategic partnership. The cooperation agreement focuses on fostering rural development, strengthening Banco Pichincha’s approach towards the Food & Agricultural sector in Ecuador and reinforcing its capabilities on digitization and data management.

Rabobank, through its subsidiary Rabo Partnerships, entered into this partnership with Banco Pichincha, the leading bank in Ecuador. During the last quarter of 2019, both entities signed an agreement to provide access to Rabobank’s agricultural banking knowledge, experience and networks. Rabo Partnerships has a track record in contributing to the development of well-functioning and inclusive financial systems in emerging markets through a long-term perspective. This is accomplished by building strong locally rooted financial service providers serving (M)SMEs, larger business clients, the rural sector and clients who have not previously had access to financial services.

“The strategic partnership with Rabobank will boost our contribution to improve the economic conditions in rural areas, especially in the micro-finance segment. Now, with a broader vision, we expect to become a strong financial player and support anchor companies in the Agriculture sector by integrating value chains in order to compete in the international arena. Our senior management has expressed its ambition to pick up this challenge. This is also a part of our responsibility as the largest and longstanding bank of Ecuador”, says Mr. Antonio Acosta, president of Banco Pichincha.

The global food and agriculture sector faces a major challenge: how to provide a growing, aging and wealthier world population with enough, healthy and sustainably produced food. “Rabobank’s commitment to invest and build strong financial service providers in emerging economies is in line with its “Banking for Food” strategy, which is aimed at providing access to its knowledge, finances and networks”, says Mrs. Marianne Schoemaker, managing director of Rabo Partnerships.

In terms of digitization, Banco Pichincha developed a mobile-based app that captures more than 120 data fields during its micro-finance sales process. This generates a large amount of data that can be used to establish a clear client risk profile for the F&A sector. According to Banco Pichincha, the scope of the agreement will help them to develop new credit policies, credit assessment and specialized training for their team. This approach also includes the creation of customer-based products and a non-financial offer, which simultaneously will contribute to increasing financial inclusion in the agricultural sector.

The agricultural potential in emerging countries is significant. The Latin American region is an important net exporter of food and agricultural commodities, accounting for 16% of the total global food and agriculture exports and 4% of the total food and agriculture imports. “To help unlock further potential for future global food production, Rabobank aspires to provide support to financial institutions and other players in agricultural value chains worldwide to enable them to increase the production, efficiency and to become more sustainable”, according to Mrs. Schoemaker.

The Ecuadorian economy is mainly based on the production and export of its natural resources. The agricultural sector has a strong impact on exports and, therefore, in the economic growth of the country. “Although the country has an enormous and diversified agricultural and food potential, only 8.1% of Ecuador’s GDP is generated by the F&A sector”, according to Mr. Acosta.

Banco Pichincha, the largest financial institution in Ecuador, supports the small producers and micro-entrepreneurs of the country with its comprehensive microfinance offer, for which it has received important international recognition such as the Smart Campaign Client Protection Certificate, the Best Private Bank and the Best Issuing Bank Partner for Women award. Its permanent pursuit of a positive impact on society makes Banco Pichincha the natural ally with whom Rabobank will promote a project of these dimensions in Ecuador.

Rabobank’s roots are in Dutch agriculture, a sector that today has an excellent reputation worldwide. The Netherlands is considered to be one of the most productive and efficient food producers in the world, often taking the lead in innovation. Despite its small size, the country is among the world’s largest exporters of agricultural products and a leader in food quality. Rabobank has played an important role in the development of Dutch agriculture and horticulture and has been leveraging its experience and expertise for international food and agri-chains for decades.