Africa’s micro, small and medium enterprises in agribusiness have received a boost following the launch of a new revolving fund aimed at boosting their growth.
Private sponsors from Netherlands, through the Africa Agribusiness Academy (AAA) launched the robust fund, that targets agri-based micro, small and medium enterprises in Kenya, Uganda and Rwanda.
The fund, known as ‘stitching’ Africa Agribusiness Academy Fund(SAAAF) , was launched in Nairobi recently and will create opportunities for agribusiness on market access, access to skills and knowledge on financial management.
It will also provide small loans to members of the academy on a sustainable basis, to help them scale up their businesses.
Through the fund, agri-based MSMES will access capital to catalyse growth in their entire value chain and make them efficient, competitive and in control of their enterprises.
Dr Stephen Birungi, the AAA Pan Africa Board Chair, said the organisation has set aside 400 thousand Euros (Sh46 million) to provide credit to agribusiness. The fund is expected to steady most agribusinesses that are run by the members.
“With SAAAF, the organisation recognises agri-based ventures’ potential and want to give them the necessary impetus to grow. The need is so big, we are calling upon other well-wishers to join us in this mission to develop Africa’s agriculture value chain through the lens of people who run the show; agri-based MSMEs,” said Mr Birungi.
“This fund we are launching today is a pacesetter in opening doors to Africa’s agribusiness players to access funds that will catalyse their growth. We see a situation where financial institutions will join in and start giving friendly credit to agriprenuers,” he added.
In 2016, a mid-term review carried out by the academy within six member countries revealed that access to finance for these small and medium agri-based enterprise remained the biggest challenge in growing their businesses.
Worse still, financial institutions were cagy in funding this category of entrepreneurs due to risks involved and very elaborate collateral and bankable reports-the review revealed.