AfDB Receives $14 Million from GAFSP to Support Agricultural SMEs in Africa
The African Development Bank Group (AfDB) has received $14 million in its first funding allocation under the Global Agriculture and Food Security Program’s (GAFSP) new private sector financing window, aimed at improving access to credit, insurance, and investment capital for agricultural small and medium-sized enterprises (SMEs) in Ethiopia, Uganda, Tanzania, Malawi, and Zambia.
The allocation is part of the Business Investment Financing Track, launched in 2024 as GAFSP’s second-generation private sector financing window. It blends grants and concessional finance from GAFSP with funding from multilateral development banks to catalyse private sector investment for smallholder farmers, producer groups, agribusinesses, and start-ups in low-income countries.
This first allocation will support the establishment of an Agro-Inputs Risk Sharing Facility, a $200 million fund hosted by the AfDB. The facility will provide $10 million in de-risking capital and an additional $4 million in grant resources to fund technical assistance designed to mobilise up to $200 million in private-sector lending. The initiative will incentivise local banks to extend credit to agro-input suppliers and strengthen the agricultural value chain.
Smallholder farmers and early-stage agrifood businesses often struggle to access finance due to perceived risks, limiting their ability to respond to rising food demand. The Risk Sharing Facility, implemented by the African Trade & Investment Development Insurance, will provide guarantees to financial institutions, encouraging commercial banks to lend to underserved agribusinesses.
Natasha Hayward, GAFSP Program Manager, said, “This first allocation demonstrates the appetite for funders to work together in this new model to solve an age-old challenge of finance for smallholder farmers: risk. By blending donor funds with multilateral and commercial finance, every programme dollar will leverage far more in private investment, multiplying the impact on food security and resilience.”
The financing will expand access to certified seeds, organic fertilisers, soil enhancers, mechanisation, and other agricultural inputs to help agribusinesses withstand extreme climates, including heat, water scarcity, and unpredictable weather. Over 1.5 million smallholder farmers and 500 agro-dealers and cooperatives are expected to benefit.
Philip Boahen, AfDB Coordinator of GAFSP, added, “By targeting agro-input dealers and smallholder farmers, this facility intends to strengthen the entire value chain, from input supply to market access, building food systems able to withstand market shocks, particularly environmental pressures. With the establishment of the Agro-Inputs Risk Sharing Facility, we are planting the seeds of a more food-secure Africa.”
The allocation aligns with African commitments to transform food systems, including the Comprehensive Africa Agriculture Development Programme and the Kampala Declaration on Accelerating the Implementation of Africa’s Food Systems Transformation.
