AfDB makes USD 9 million Equity Investment in Fund for Agricultural Finance in Nigeria
The African Development Bank has approved a USD 9 million equity investment (approximately 12% of the fund’s capitalisation) in the Fund for Agricultural Finance in Nigeria (FAFIN) to provide expansion capital to agricultural small and medium-sized enterprises (SMEs).
FAFIN is a first-generation private equity fund that provides financial, capacity-building and technical assistance to commercially viable SMEs in the Nigerian agribusiness sector, through a unique value chain-centric approach, and using a combination of equity, quasi-equity and convertible loan instruments. FAFIN implements its strategy and constructs its portfolio through a bifocal lens consisting of the twin objectives of competitive financial returns and measurable positive social impact.
The Fund is jointly sponsored by the German KfW Development Bank and the Government of Nigeria, through the Federal Ministry of Agriculture and Rural Development (FMARD). The Fund Manager is Sahel Capital (Mauritius) Limited, a fund management firm incorporated in Mauritius in 2013.
The project is expected to deliver strong development outcomes from (i) household benefits and employment through the creation of a large number of jobs and the provision of certain agricultural products; (ii) positive gender and social effects through the implementation of out-grower schemes and supporting rural development; and (iii) private sector development through alleviation of financial constraints faced by agribusinesses and enhancing agricultural value chains.
Illustration Photo: Farmer taking care of cowpea plants in a field in northern Nigeria (Credit: International Institute of Tropical Agriculture (IITA)/Wikimedia Commons CC BY-NC 2.0) https://adalidda.net/posts/wQeipzXiXXkWZQiNy/afdb-makes-usd-9-million-equity-investment-in-fund-for