New multi-donor fund Financing Agricultural Small-and-Medium Enterprises in Africa

18 September 2023.  Agricultural small and medium enterprises (agri-SMEs), as Africa's largest employer and economic engine, are the key to fighting hunger. Yet three out of four agri-SMEs can’t access bank loans, and are too large for microfinance, creating an estimated $100 billion gap in unmet demand for financing. Bridging this gap is critical to feeding the future.

At the 2023 U.N. General Assembly, USAID and Norway announced the Financing for Agricultural Small-and-Medium Enterprises in Africa (FASA) Fund to spur investment in Africa’s agricultural growth. 

Working with Congress, USAID and Norway will each provide an initial commitment of $35 million. With these commitments, Norway and the U.S. aim to reach $200 million through additional donor contributions to catalyze hundreds of millions more in commercial financing by reducing investment risk. This fund has the potential to support 500 agri-SMEs and 1.5 million smallholder farmers, ultimately benefiting nearly 7.5 million people. The fund will also support nearly 60,000 private sector jobs.

FASA Fund’s Impact

Over the next 10 years, FASA Fund aims to support 500 agri-SMEs and 1.5 million smallholder farmers, ultimately benefiting 7.5 million people while bolstering nearly 60,000 jobs. The Fund will actively invest in climate adaptation; gender equality; crop diversity to better withstand shocks from pests, weather, and disease; and regenerative agriculture practices that integrate conservation efforts and restore soil health. Through FASA Fund, agri-SMEs will:

• Increase food and nutrition security: Boost agricultural productivity; strengthen supply chains; connect small-scale farmers to markets, innovation and technology; and improve access to food for local communities.
• Reduce poverty: Generate growth in agriculture, the most effective sector at poverty reduction in Africa.
• Combat climate change: Deliver the tools and skills that farmers and businesses need to adapt to climate change and invest in climate-smart practices.
• Close gender gaps: Break down barriers for women business owners and farmers to access the tools and services they need to be more productive. One-third of agri-SMEs are women-owned and sixty percent of women in Sub-Saharan Africa work in agriculture.
• Spur economic growth: Enable businesses to scale, create employment opportunities and grow into larger markets at home and abroad.

 

Related: 

19 September 2023. At an event hosted by the World Economic Forum, USAID Administrator Samantha Power and Anne Beathe Tvinnereim, the Norwegian Minister of International Development, launched a new multi-donor fund designed to unlock hundreds of millions in financing for small-and medium-sized agricultural businesses (agri-SMEs) in Africa.