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US$19mn in agribusiness financing for East Africa

The US has launched a US$19mn, five-year agribusiness financing plan targeting Kenya, Malawi and Tanzania

The project will provide financing to small and medium-sized agribusinesses and training for businesses that work along the agricultural value chain in the three nations.

“Adding value to farm produce and increasing regional trade in agriculture has the potential to transform the economy in these countries. The program seeks to build stronger linkages between agribusinesses the three countries,” said Kate Snipes, regional agricultural counsellor for East African Community member countries and Malawi at USDA.

According to Snipes, the programme will help agribusinesses access finance and acquire knowledge about the benefits and methods of trading across borders. Lenders will be trained to boost their ability to serve agricultural businesses, focus on risk management and design unique products specifically for agricultural sector.

Additionally, the programme will support technical and management training for agribusiness entrepreneurs as well as those managing agricultural cooperatives, storage facilities and regional agricultural exchanges.

Agribusinesses can also access a US$50mn loan guarantee facility backed by the United States’ Overseas Private Investment Corporation.

Within the African region, local banks and other financial organisations consider agriculture a risky business venture, leading to low levels of local financing. Consequently, agribusinesses are currently under-funded, compared to other sectors in African economies.

Mwangi Mumero