To help Africa’s Small and Medium-sized Enterprises (SMEs) in the agricultural sector, the African Development Bank Group and the Canadian Government recently established the Agri-food SME Catalytic Financing Mechanism. This new agricultural development was made known by the organisations at a press briefing during the Dakar 2 Africa Food Summit.
The “Agri-food SME Catalytic Financing Mechanism” is a special fund with the mission to de-risk and catalyse investment for agriculture SMEs, strengthen agricultural value chains, and enhance food security across the continent. Speaking to the media, Dr. Beth Dunford, Vice President of the bank for agriculture, human, and social development, said: “At the Africa Food Summit, we have seen a strong commitment to addressing the financing gap for SMEs and creating an environment that encourages private sector investments in climate-smart, gender-oriented agricultural solutions.” She said that the Agri- Food SME Catalytic Financing Mechanism would open doors for these companies in Africa, particularly for women and young people.
“It should be noted that Canada contributed CAD100 million ($73.5 million) to fund the mechanism, which is hosted by the African Development Bank. Small and medium agri-businesses produce or transport around 65 per cent of Africa’s food, yet they face a financing gap of more than $180 million annually,” she added. The mechanism, as reported, will offer financial intermediaries, such as agribusinesses, microfinance organisations and impact funds, concessional financing and technical support. The funding and support are intended to give the intermediaries the ability to lend money to agri-SMEs that employ women and companies that increase their resilience to climate change.
The bank’s Affirmative Finance Action for Women in Africa (AFAWA) goal of bridging the $42 billion access to finance gap for women-led SMEs and accelerating their growth would be aided by the Agri- Food SME Catalytic Financing Mechanism. Similarly, the parliamentary secretary to Canada’s Minister of International Development, Anita Vandenbeld said: “The best way to build up food security in Africa is to work with small-and-medium-sized agriculture and food businesses. “