The African Guarantee Fund (AGF) has announced a partnership with ResponsAbility Investments AG (responsAbility) to offer a loan portfolio guarantee facility in the amount of USD 5 million.

The partnership aims to increase financing for small and medium-sized enterprises (SMEs) in the African agricultural value chain, with a focus on companies engaged in activities related to crops and agricultural products or commodities.

Indeed, African agricultural SMEs face many challenges that prevent them from reaching their full potential, mainly: access to appropriate and accessible financing at different stages of growth; access to talent and the ability to attract and retain qualified employees; an ecosystem of support and collaboration between public, private and financial players; access to knowledge that strategically supports development; and access to markets, including information, relationships with suppliers and customers, and physical infrastructure.

This partnership will play a critical role in bridging the estimated $74 billion annual funding gap faced by agricultural SMEs in sub-Saharan Africa.

AGF Group CEO Jules Ngankam said: “Agro-food companies tend to have higher risk profiles and limited cash flow compared to equivalent SMEs in other sectors. Our risk-sharing partnership will enable responsAbility to scale up its lending to agribusinesses across Africa, enabling agribusiness SMEs to play a greater role in connecting different components along the value chain of food production. This partnership demonstrates our commitment to African SMEs and the sustainable development of the continent by supporting the growth of agricultural SMEs, increasing their productivity and enabling them to adapt to the changing environment.

Michael Fabbroni, Country Director, Kenya and Head of Financial Institutions Debt Africa, responsAbility added: “This partnership reflects the alignment of our values ​​in promoting a sustainable agricultural sector. Furthermore, it shares our vision of Africa’s key role in future global food production.

ResponsAbility will also use the guarantee facility to increase lending to women-owned/led agribusinesses as well as climate-focused businesses involved in energy efficiency, renewable energy, natural resource management and climate insurance .

African Guarantee Fund (AGF) is a non-banking financial institution whose objective is to promote economic development, increase employment and reduce poverty in Africa by providing financial institutions with guaranteed products and development assistance. capabilities specifically aimed at supporting SMEs in Africa. AGF warranty products are used in 40 African countries.