Agrifood SMEs to benefit from new Sh16.4 billion funding programme
The move aims to bolster food security and resilience across the continent, which continues to bear the greatest impact of the ongoing crisis.
A new €109.5 million (Sh16.37 billion) funding programme has been launched to unlock credit access for agrifood small and medium-sized enterprises (SMEs) across Africa.
The move aims to bolster food security and resilience across the continent, which continues to bear the greatest impact of the ongoing crisis.
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A study by the World Bank shows that although food production in Africa has grown by 160 per cent since the early 1990s, nearly 60 per cent of the continent’s population continues to experience some level of food insecurity.
The initiative, dubbed ‘TERRA’ (Transforming and Empowering Resilient and Responsible Agribusiness), is a joint effort between Italy’s development institution, Cassa Depositi e Prestiti (CDP), the Food and Agriculture Organisation of the United Nations (FAO), and the European Union (EU).
It targets privately owned micro, small and medium agrifood enterprises (MSMEs) in sub-Saharan Africa, North Africa, and also Türkiye.
Notably, the programme seeks to enable local financial institutions to extend credit lines and guarantees to agribusinesses, a sector often deemed too risky by lenders.
Agriculture, forestry, and fishing account for around 17 per cent of sub-Saharan Africa’s GDP, underscoring the sector’s importance in driving inclusive economic growth and food security.
In many low- and middle-income countries, MSMEs in the agrifood chain face persistent barriers to finance due to perceived risks linked to climate shocks, market volatility and weak collateral frameworks.
With the EU guarantee of up to €109.5 million (Sh16.37 billion), CDP will offer dedicated financing and guarantees to selected banks and corporations to help scale agricultural investments.
The FAO Investment Centre will complement the financial support with tailored technical assistance to strengthen the capacity of financial institutions.
This includes advisory services, capacity building and data analysis, as well as the development of more resilient lending practices and value chain assessments.
According to FAO, such integrated support will enable lenders to better understand and manage agrifood risks while expanding their loan portfolios to underserved SMEs and cooperatives.
“FAO has co-designed this innovative programme with both the European Union, a long-term strategic partner of the FAO Investment Centre, and with Cassa Depositi e Prestiti, a like-minded development institution from one of our member countries,” said FAO Director-General QU Dongyu.
“Our role will be to leverage FAO’s technical expertise in food and agriculture, and finance to support local financial institutions through tailored technical assistance. Knowledge is the best de-risking instrument.”
Echoing the same optimism, Dario Scannapieco, CEO of Cassa Depositi e Prestiti, said the partnership agreement marks a key step in deploying the flagship programme.
“TERRA will enable CDP to mobilise new financial resources to expand access to finance across the agrifood value chain. By combining FAO’s technical expertise with CDP’s catalytic role, the programme will foster inclusive and resilient development, contributing to food security, climate adaptation and economic empowerment,” Dario said.
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