The Facility for Agricultural Finance in Africa Receives Fapa Donors' Approval Seal

25 July 2018
Content from a Premium Partner
African Development Bank (Abidjan)

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).

During the pilot phase, 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). To ensure the sustainability of the Agri-SMEs and maximise the development impact, these investment criteria will be used: High transformational impact for integrating value chains and number of jobs created.

"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.

About FAPA

The Fund for African Private Sector Assistance (FAPA), is a multi-donor trust fund that provides grant funding for technical assistance activities to public and private sector entities domiciled in Africa. FAPA resources are utilized to promote innovative programs that specifically support the development of SMEs in Africa. FAPA is one of the components of the Enhanced Private Sector Assistance (EPSA) initiative domiciled at the African Development Bank.

2030, It Is Estimated That Africa's Urban Food Markets Will Be Valued At Us$1 Trillion.

Read the original article on African Development Bank (AfDB).

Tagged:
Copyright © 2018 African Development Bank. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 500 reports a day from more than 100 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.