Investments - Catalytic Grants and Blended Finance

During the review, we analyzed our past programs to guide organizational realignment, evaluated our 15-year financing impact on market access, and assessed the sustainability of our systems without AGRA's oversight.

Our review revealed that AGRA's investments addressed persistent financial barriers, including financiers' hesitancy to boost agricultural portfolios and government policies that adversely affect agricultural finance. Notable findings included;

An Africa-wide system to measure the performance of SMEs and formal-based organisations that AGRA invested in helped provide more clarity on their progress over time and the impact of external financing on their processes.

The championing of government subsidies towards inputs, fertilisers and equipment was also critical in helping increase farmers’ ability to afford them.

Blended Finance

Unlocking, Catalysing and De-risking Agricultural Finance

To bolster our agricultural finance systems, we adopted a blended finance strategy encompassing catalytic investments, digital methods, and alternative lending. In 2022, our priorities were:

  • Collaborating with partners to boost capital supply, increase finance deals, and initiate blended financial tools.
  • Motivating both public and private sectors to promote knowledge-sharing, digital innovation, and focus on youth and gender-driven entrepreneurship.
  • Employing public funds for risk mitigation by co-creating financial models that distribute investment risks.

By focusing on sustainability and scalability, we made strategic investments in the ecosystem

To bolster our agricultural finance systems, we adopted a blended finance strategy encompassing catalytic investments, digital methods, and alternative lending. In 2022, our priorities were:

  • Financial Inclusion for Smallholder Farmers Program (FISFAP) for enhancing financial inclusion in Ghana, Kenya, and Tanzania using digital solutions.
  • Programs like PROFIT and GIRSAL aimed at reducing risks in agricultural lending in Kenya and Ghana.
  • Agri-Business Capital Fund (ABC Fund) for Agri SMEs and rural financial institutions in Africa.
  • Initiatives to innovate new lending models and tools for Agri SMEs.
  • Investments in blended finance entities including AFC, MAIIC, BDF, UDB, BADF, GIRSAL, and GAPI.

Economy Based Curation

AGRA utilizes tools to guide government agricultural investments, tailoring interventions based on economic capacity:

  • For Nascent Economies (like Mali, Burkina Faso, Ethiopia, and Mozambique) with a dominant government role, AGRA focuses on enhancing the investment environment and promoting inclusive sourcing model legislations.
  • In Transitioning Economies (such as Malawi, Rwanda, Tanzania, and Uganda) with emerging private sectors, AGRA offers technical support for finance and Business Development Service (BDS) growth, provides affordable capital solutions, and works on price stabilization and local sourcing incentives.
  • For Industrializing Economies (including Kenya, Nigeria, Ghana, and Zambia) with robust private sectors, AGRA promotes replication of successful models, connects promising SMEs to agri-friendly financial institutions, and collaborates on legislation encouraging local, inclusive business and finance strategies.

Financial Bridge interventions across business lines

Seed systems

Goal: Enhance access to finance for seed companies

  • Creating demand for preferred seed varieties and enhancing seed company finance-ability.
  • Strengthening implementing institutions to support seed companies.
  • Adopting a standard performance measurement tool for seed firms.
  • Leveraging every USD 1 spent by AGRA to activate fivefold in private investments.
  • Implementing True Cost Accounting to assess the comprehensive value and impacts of food production.
  • Offering 'true value' investment opportunities in food enterprises for various stakeholders.

Sustainable Farming

Goal: Enhance access to finance for inputs

  • Partner with Financial Service Providers (FSPs) to scale agro dealer and village-based advisor (VBA) finance models in an inclusive manner
  • Develop business cases for financial products eligible for ‘Green and Climate Finance.’ Climate finance seeks to support mitigation and adaptation actions that address climate change whereas Green finance mobilises towards sustainable development priorities
  • Support agricultural insurance actors (Pula and ACRE) to de-risk input finance

Inclusive Markets & Trade

Goal: Enhance access to finance for SMEs

  • Improve markets (through innovations) for financial and non-financial service delivery to SMEs
  • Partner with FSPs to scale SME finance models and FSPs’ access to de-risking facilities
  • Partner with Business Development Service (BDS’s) providers to improve their capacity to enhance bankability of SMEs

Policy and State Capacity

Goal: Enhance Agricultural finance

  • Promote blended finance to enhance the effective use of public funds in advancing agricultural finance
  • Support policy reforms to address regulatory barriers in agricultural finance
  • Promote Kampala principles to improve coordination of public support for agricultural finance