$1 million fund for West and Southern African agri SMEs
London, July 26, 2018 (AltAfrica)-FAPA donors have approved a grant of US$1 million, to assist in the preparation, launch and full implementation of the technical assistance activities linked to the Facility for Agricultural Finance in Africa (FAFINA)
FAFINA will concentrate on West & Southern African regions and will invest opportunistically on a Pan–African scale. Transaction sizes of between US $3 million and US $30 million will be the target market to reflect recurring demand from smaller private sector projects. FAFINA’s investment will range from US$1 million to US$10 million (maximum – 50% of total project cost).
“FAFINA intends to catalyse financing to Agri-SMEs in Africa through the use of innovative instruments. It is in full alignment with our Bank’s feed Africa strategy and FAPA’s focus on Agri-SME financing”, said Olivier Eweck, Director of the Syndication, Co-financing and Technical Solutions Department at the Bank, and Chair of the FAPA Technical Committee.
Since January 2018, FAPA donors have approved 8 projects and a cumulative grant amount of US$7.4 million.
By 2030, it is estimated that Africa’s urban food markets will be valued at US$1 trillion.
Despite this potential, the sector substantially lacks financial investment. The share of commercial bank lending to agriculture remains very low, ranging from 3% in Sierra Leone, 4% in Ghana and Kenya, 6% in Uganda, 8% in Mozambique to 12% in Tanzania.
Limited access to finance is a well-known constraint for this sector and the need is even more acute for Agri-SMEs. In an attempt to solve this problem, FAPA donors approved a grant of US$1 million, to assist in the preparation, launch and full implementation of the technical assistance activities linked to the Facility for Agricultural Finance in Africa (FAFINA).