According to the organisation’s news, AGRA and Aceli have signed a letter of intent committing to jointly work together to test and scale up innovations that substantially drive down the cost and risk of financing SMEs in the agriculture space.
Aceli Africa is a market incentive facility that offers financial incentives to mitigate risk and compensate lenders for the transaction costs of serving high-impact agricultural SMEs. Aceli plans to support its 25 lending partners in mobilising US$700mn in financing for agri-SMEs by 2025 with a focus on SMEs that are gender inclusive, improve food security, and practice climate-smart agriculture.
Vanessa Adams, vice-president, strategic partnerships with AGRA, said, “AGRA firmly believes that it is vital to unlock the potential of SMEs for agricultural transformation across Africa. This partnership with Aceli is a step in this direction, as the increased capital flows and technical assistance will enable the SMEs to unleash their potential and offer better services to smallholder farmers. This partnership will also work on implementing digital solutions to make financial record keeping and reporting more efficient and reliable which will improve the bankability of the SMEs.”
Brian Milder, CEO OF Aceli Africa, commented, “Aceli Africa shares AGRA’s vision for an inclusive and sustainable agricultural transformation that creates economic opportunities, builds a resilient regional food system, and stewards the natural environment. Achieving this vision is only possible if we can unlock the growth and impact potential of agricultural SMEs. Building on AGRA’s leading role as a convener and advocate and Aceli’s data-driven approach to mobilising private sector lending, together we can address the long standing barriers that limit the flow of capital to agricultural SMEs.”
AGRA and Aceli are like-minded institutions that will partner specifically in promoting innovations that address the barriers to capital flowing to agricultural SMEs at scale.