By Antynet Ford

Farmers and small to  medium-sized agribusinesses in operation for at least two years in any one of 13 countries in Africa are being offered new access to debt financing and technical support by the Social Enterprise Fund for Agriculture in Africa (SEFAA) if their business is helping smallholders.

SEFAA, an impact-first fund that provides growth financing to agricultural enterprises that improve the productivity and income of smallholder farmers, launched in 2021, has now opened applications for agribusiness SMEs and farmers working across the agri-food value chain, offering a combination of flexible financing and technical assistance designed to strengthen productivity and profitability.

With the MasterCard Foundation and KFW Development Bank as the main investors, SEFAA is making investments of Sh38,778,000 to Sh310,224,000 ($300,000 to $2.4 million), with financing structured primarily as a loan, but with the investors (KFW Development Bank nd MasterCard Foundation) also potentially putting in money as owners by buying of shares or also through flexible hybrid arrangements.  

To qualify for SEFAA, the agribusiness or farmer must be formally registered, operating in either Benin, Burkina Faso, Cameroon, Côte d’Ivoire, Ethiopia, Ghana, Kenya, Malawi, Nigeria, Tanzania, Togo, Uganda, or Zambia with at least two years of operational history with a proven concept.

The fund operates on a rolling application basis, with no fixed deadline, hence allowing agribusiness SMEs to apply as they reach readiness.

The agribusinesses are expected to demonstrate profitability or a credible pathway towards it, alongside measurable benefits to smallholder farmers.

While the main goal is to finance farmers and SMEs in agribusiness, SEFAA also provides a Technical Assistance Facility aimed at strengthening investees through management capacity building, product certification, market research, ESG compliance, and the development of structured out-grower networks linking enterprises to smallholder farmers.

The aim of the initiative is to help address one of the most persistent challenges facing Sub-Saharan agribusinesses today, being limited access to appropriate and patient capital combined with the technical support needed to scale sustainably, with most agribusiness SMEs struggling to secure financing from local banks and government cooperatives.

The need to mobilise such businesses is acute as climate change, food insecurity, and market inefficiencies continue to shape the continent’s agricultural landscape.