At the Africa Food Systems Forum in Kigali, one question is taking centre stage: how can Africa turn ambitious commitments to transform agriculture into financing that actually reaches the small and growing businesses feeding the continent?
While billions of dollars are being mobilised for agricultural development, much of the capital continues to struggle to reach local agri-SMEs. The challenge is increasingly shifting from simply raising finance to building a stronger connection between policy, investors and the businesses that need funding to expand.
Dr. Mallé Fofana, Deputy Executive Director and Head of the Directorate for Green Growth Implementation at the Global Green Growth Institute, discussed the barriers preventing international capital from reaching local agricultural enterprises and the steps needed to make these businesses more attractive to commercial lenders.
A key part of that process is helping early-stage agri-SMEs become more bankable. Strengthening business models, improving financial management and developing investment-ready enterprises can help bridge the gap between promising agricultural ventures and the commercial finance they need.
Blended finance could also play a critical role. By combining public or development funding with private capital, blended-finance models can reduce risk for commercial banks and encourage them to lend more to agriculture. For a sector that remains essential to Africa’s food security and economic growth, unlocking this capital could be transformative.
