ResponsAbility will 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.
The African Guarantee Fund (AGF) has partnered with ResponsAbility Investments AG (responsAbility) to offer a Loan Portfolio Guarantee facility amounting to USD 5 million.
The partnership agreement was signed earlier this morning at their Africa House offices in Nairobi, Kenya. This partnership is entirely dedicated to increasing the financing of Small and Medium Enterprises (SMEs) in the African 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 mainly: 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 USD 74 billion annual financing gap facing Agri-SMEs in sub-Saharan Africa.
AGF Group CEO, Jules Ngankam said, “Agri-businesses tend to have higher risk profiles and limited cash flow compared to equivalent SMEs in other sectors. 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 and Head of Financial Institutions Debt Africa, responsAbility 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.