The European Union (EU) has provided €45 million to support smallholder agri-businesses in rural areas in Nigeria and other African countries. The EU disclosed this in a statement yesterday.
The EU Commissioner for International Cooperation and Development, Neven Mimica, during the inauguration of the support fund in Rome, said the launch of the support known as the new Agri-Business Capital (ABC) Fund, would help deliver on the Africa-Europe Alliance for Sustainable Investments and Jobs.
He said at the launch organised by the International Fund for Agricultural Development (IFAD), that EU was committed to boosting agri-business investments in Africa.
The commissioner also expressed EU’s commitment to strengthening livelihoods and creating sustainable jobs in rural areas, especially among traditionally under-served communities.
“The ABC Fund will help us achieve this, which is why it has our full backing. The EU has made €45 million available to the Fund.
“On top of this, the Luxembourg government and the Africa Green Revolution Alliance, an international NGO, are contributing €5 million and $5 million respectively.
“The new ABC Fund, established by IFAD, is primarily geared towards individual smallholders and farmers’ organisations, with loan sizes from $25,000 to $1 million (about €22,000 – €885,000), thus improving their access to finance.
“This ‘missing middle’ has the potential to be profitable and to impact development, but has lacked sufficient funding until now,” the commissioner said.
The official said that it was expected to mobilise more than €200 million in investments and could benefit up to 700,000 households in rural areas.
According to the commissioner, the ABC Fund is a major blending operation for agricultural investments in developing countries.
“It covers direct investments such as small-scale loans for small and medium-sized enterprises, farmers’ organisations and ‘agripreneurs’, along with indirect investment in local financial institutions for subsequent on-lending.
“It builds on existing IFAD development activities to screen opportunities and reduce the risk attached to subsequent investments.
“It is expected to attract significant additional funding from other sources – private and impact investors alike,” the commissioner said.