Copyright ghanamma
The African Development Bank Group (AfDB) has received 14 million dollars under a new private sector financing window to support smallholder farmers and agribusinesses, with the facility expected to unlock up to 200 million dollars in capital. The funding comes from the Global Agriculture and Food Security Program (GAFSP) and represents the first allocation under its new Business Investment Financing Track, targeting food systems in low income African countries. The funds will establish an Agro Inputs Risk Sharing Facility, a 200 million dollar fund hosted by AfDB, designed to incentivize local banks to lend to agro input suppliers. An additional four million dollar grant will provide technical assistance to agricultural small and medium sized enterprises (SMEs) in Ethiopia, Uganda, Tanzania, Malawi, and Zambia. The initiative targets more than 1.5 million smallholder farmers and 500 agro dealers and cooperatives, addressing financing barriers that keep small scale farmers and agribusinesses locked out of credit due to high perceived risks and lack of collateral. The African Trade and Investment Development Insurance (ATIDI) will implement the facility, offering guarantees to local financial institutions to encourage greater lending to agrifood enterprises. ATIDI provides political and credit risk insurance to investors across the continent. GAFSP Program Manager Natasha Hayward said the new model demonstrates the appetite for funders to work together to solve the age old challenge of finance for smallholder farmers, particularly risk management. AfDB’s GAFSP Coordinator Philip Boahen stated that the initiative would strengthen Africa’s entire agricultural value chain from input supply to market access. The facility aims to expand farmers’ access to certified seeds, fertilizers, mechanization, and soil enhancers, helping them adapt to extreme weather and climate shocks. The project aligns with continental commitments including the Comprehensive Africa Agriculture Development Programme (CAADP) and the Kampala Declaration.
