The Alliance for a Green Revolution in Africa (AGRA) has partnered with Aceli Africa to enhance capital flows to African agribusiness small and medium-sized enterprises (SMEs) as well as support a financially inclusive agricultural transformation across Africa.
AGRA and Aceli have signed a letter of intent committing to jointly work together to test and scale-up innovations that substantially drive down the cost and risk of financing SMEs in the agriculture space.
Aceli Africa is a market incentive facility that offers financial incentives to mitigate risk and compensate lenders for the transaction costs of serving high-impact agricultural SMEs.
A statement issued to the media said the organization plans to support its 25 lending partners in mobilizing 700 million US dollars in financing for agri-SMEs by 2025, with a focus on gender inclusive, improving food security, and practising climate smart agriculture.
Vice President Strategic Partnerships with AGRA, Ms Vanessa Adams said AGRA firmly believes that it is vital to unlock the potential of SMEs for agricultural transformation across Africa.
“This partnership with Aceli is a step in this direction, as the increased capital flows and technical assistance will enable the SMEs to unleash their potential and offer better services to smallholder farmers,” she said.
Ms Adams further said the partnership will also work on implementing digital solutions to make financial record keeping and reporting more efficient and reliable which will improve the bankability of the SMEs.
Aceli Africa CEO, Mr Brian Milder said their organization shares AGRA’s vision for an inclusive and sustainable agricultural transformation that creates economic opportunities, build a resilient regional food system, and stewards the natural environment.
“Achieving this vision is only possible if we can unlock the growth and impact potential of agricultural SMEs. “Building on AGRA’s leading role as a convener and advocate and Aceli’s data driven approach to mobilizing private-sector lending, together we can address the long standing barriers that limit the flow of capital to agricultural SMEs,” said Mr Midler.
AGRA and Aceli will partner specifically in promoting innovations that address the barriers to capital flowing to agricultural SMEs at scale.
“With today’s announcement, AGRA and Aceli Africa also announce the first call for an Innovation Challenge for sustainable, scalable, and innovative business development solutions to improve the quality of financial statements among agricultural SMEs,” he added.
AGRA Head of Innovative Finance, Ms Hedwig Siewertsen said they want agricultural SMEs to grow, and for that growth access to finance is key.
“Our partnership with Aceli Africa seeks to address the root cause of the lesser return on Agri SME finance by investing in innovations that reduce the cost and risk of financing smaller SMEs,” said Siewertsen.
Established in 2006, AGRA is an African-led and Africa-based institution that puts smallholder farmers at the centre of the continent’s growing economy by transforming agriculture from a solitary struggle to survive into farming as a business that thrives, while Aceli Africa is a market incentive facility that unlocks capital for agricultural SMEs in East Africa.