– Ranked the Number. 1 Top Smartphone Camera by DXOMARK The new HUAWEI P60 Pro is now available in South Africa! With its cutting-edge…
AGF, responsAbility partner to boost agri-SME financing
The African Guarantee Fund (AGF) has partnered with an investment vehicle managed by responsAbility Investments AG (responsAbility) through a $5-million loan portfolio guarantee facility amounting.
The partnership is entirely dedicated to increasing the financing of SMEs in the agricultural value chain with a focus on businesses engaged in activities related to crops and farming products or commodities.
Africa’s agri-SMEs face numerous challenges that hinder them from achieving their full potential.
This includes access to finance that is appropriate and accessible for different stages of growth; access to talent and the ability to attract and retain qualified employees; an ecosystem of support and collaboration between public, private, and financial players; access to knowledge that strategically supports development; and access to markets, including information, connections with suppliers and clients, and physical infrastructure.
This partnership will therefore play a critical role in bridging the estimated $74 billion annual financing gap facing agri-SMEs in sub-Saharan Africa, says AGF group chief executive Jules Ngankam.
“Agri-businesses tend to have higher risk profiles and limited cash flow compared to equivalent SMEs in other sectors,” he explains.
“Our risk-sharing partnership will allow responsAbility to scale up lending activities to agribusinesses across Africa enabling agri-SMEs to play a bigger role in connecting different components along the food production value chain. This partnership demonstrates our commitment to African SMEs and to the continent’s sustainable development by supporting the growth of agri-SMEs, increasing their productivity and enabling them to adapt to the changing environment.”
Michael Fabbroni, country director: Kenya, added, “This partnership reflects the alignment of our values in fostering a sustainable agricultural sector. Additionally, it shares our vision of Africa’s key role in future global food production.”
responsAbility will also use the guarantee facility to increase lending to women owned/led agribusinesses as well as climate-focused businesses involved in energy efficiency, renewable energy, natural resource management and climate insurance.
AGF is a non-bank financial institution whose objective is to promote economic development, increase employment and reduce poverty in Africa by providing financial institutions with guarantee products and capacity development assistance specifically intended to support SMEs in Africa. Its guarantee products are utilised in 40 African countries.