(from left to right) Nungari Mwangi, AgriSME Strategy and Partnerships Officer, AfDB, Atsuko Toda, Director of Agricultural Finance and Rural Development, AfDB, Andrew Mude, Leader, AgriSME Development and Finance, AfDB, Beth Dunford, Vice President, Agriculture, Human Resources and Social Development, AfDB, Anita Vandenbeld, Parliamentary Secretary to Canada’s Minister for International Development and Edmond Wega, Chief Executive Officer of Canada, AfDB, pose for a photo at the press conference to launch SME Catalytic Financing Agri-Food of the African Development Bank Facility”.
The African Development Bank Group and the Government of Canada have established a new special fund to support small and medium-sized enterprises (SMEs) in Africa in the agricultural sector.
He Catalytic Financing Mechanism for Agrifood SMEs aims to catalyze and reduce investment risk for agricultural SMEs, as well as strengthen agricultural value chains and improve food security across the continent. The two organizations made the announcement at a press event on January 27 that took place during the Dakar 2 Africa Food Summit.
“At the Africa Food Summit, we have seen a strong commitment to address the financing gap for SMEs and create an environment that encourages private sector investment in climate-smart and gender-oriented agricultural solutions,” said Dr Beth Dunford. , Vice President of the Bank. for Agriculture, Human and Social Development she told reporters. “The Catalytic Financing Mechanism for Agrifood SMEs will help generate opportunities for these businesses in Africa, particularly for women and youth,” she said.
Canada provided CAD 100 million ($73.5 million) to finance the facility, which is organized by the African Development Bank. Small and medium-sized agricultural enterprises produce, process or transport around 65% of Africa’s food, yet they face a funding gap of more than $180 million a year.
The facility will provide concessional financing and technical assistance to financial intermediaries, including agribusinesses, microfinance institutions, and impact funds. The financing and assistance is intended to enable intermediaries to provide loans to agricultural SMEs working with women and businesses building resilience to climate change.
The Catalytic Financing Facility for Agri-Food SMEs will build on the Bank Group’s Affirmative Financial Action for Women in Africa (AFAWA) goal of closing the $42 billion financing access gap for targeted SMEs by women and accelerate their growth.
The Facility represents the Bank’s first blended lending service specifically targeted at SMEs operating across the entire agricultural value chain. It mobilizes public funds to de-risk farm finance, rally support to make SMEs more bankable and work with capital providers to make banks more ‘farm-friendly’.
“The best way to increase food security in Africa is to work with small and medium-sized agricultural and food enterprises. Through a shared commitment between Canada and the African Development Bank, the Agri-Food SME Catalytic Financing Facility will promote resilient growth and climate adaptation. It will also help African SMEs to pursue climate-smart role models and support women by changing attitudes that perpetuate gender gaps in financial inclusion,” said Anita Vandenbeld, Parliamentary Secretary to Canada’s Minister for International Development.
Structured as a multi-donor trust fund, the Facility is open and welcomes the participation and contribution of other development partners. Through co-financing with the financial instruments of the African Development Bank, the Facility will increase the amount of attractive capital that reduces risk for agricultural SMEs and will leverage more private sector financing for impactful investments in the agri-food sector.
The Dakar 2 Summit, held under the motto Feed Africa: food sovereignty and resilience, is a high-level continental conference organized by President Macky Sall of Senegal and the African Development Bank Group. 34 heads of state attended.
The Dakar 2 Summit also brought together agriculture and finance ministers, central bank governors, private sector representatives, farmer organizations and development partners to mobilize high-level political will and financial resources towards Africa’s agricultural transformation. .
