Multi-Donor Fund Unlocks Financing for Africa's Small and Medium-Sized Agricultural Enterprises

Norway and USAID also announced that Investisseurs & Partenaires (I&P) – a pioneering impact investment group dedicated to financing and supporting African entrepreneurs while strengthening entrepreneurial ecosystems across the African continent – was competitively selected as the FASA fund manager. The CGIAR Hub for Sustainable Finance (Impact SF) will be its agricultural and climate partner. I&P brings a strong track record in fund management in the agriculture and food systems sector. The Small Foundation is the first philanthropic organization to make a financial contribution to the FASA investment fund and will support the Fund’s learning agenda.

The combined announcements initiate operations of the FASA Fund that could ultimately support 1,000 agri-SMEs, create and maintain over 70,000 jobs, and benefit over one million smallholder farmers over ten years. Agri-SMEs support 95% of smallholder farmers in sub-Saharan Africa, handle over 60% of all food production and trade on the African continent and create 70% of formal employment in food systems. Together with the farmers they support, agri-SMEs are the driving force behind transforming agriculture and food systems in Africa and are essential for creating a prosperous and more resilient future for all.

FASA – which was announced by USAID Administrator Samantha Power and the Norwegian Minister of International Development Anne Beathe Tvinnereim during the United Nations General Assembly in 2023 – will invest catalytic capital in funds focused on agri-SMEs across Africa to unlock business growth. The Fund is designed to help fill the estimated $100 billion financing gap in sub-Saharan Africa and unlock hundreds of millions of dollars in financing for agri-SMEs by reducing the risk of investing in agriculture – a risky sector compared to others. FASA will be providing catalytical capital to underlying investment funds that will lend to or invest in agri-SMEs across Africa. With anchoring from FASA, these investment funds will be able to attract more needed capital to serve larger numbers of agri-SMEs. USAID’s contribution is part of Feed the Future – a USA government initiative to address hunger, poverty, and malnutrition.