The Dutch Ministry of Foreign Affairs and United Kingdom’s Foreign, Commonwealth & Development Office (FCDO) join IKEA Foundation, the Swiss Agency for Development and Cooperation, and USAID’s Feed the Future initiative as anchor funders to Aceli Africa. The new awards of $11.9M from the Dutch government and £13.5M from the British High Commissions in Dar es Salaam and Kampala bring total donor commitments to Aceli’s innovative market incentive facility to $62M.
Continuing disruptions from COVID-19 and a worsening climate crisis have amplified the longstanding need for investment in African agricultural value chains that are inclusive, resilient, and environmentally sustainable.
Launched in September 2020, Aceli Africa is a market incentive facility that aims to mobilize $600M in private sector lending to small- and medium-enterprises (SMEs) in the East African agriculture sector by 2025. As of November 2021, 26 leading commercial banks and impact investors have registered for Aceli Africa’s financial incentives program, which mitigates the risk and improves the returns of lending to high-impact agricultural SMEs.
In its first 15 months of operations, Aceli supported its lending partners in issuing 254 loans totaling $30M. Nearly half of loans have been made to first-time borrowers. SMEs receiving Aceli-supported loans have channeled $108M into rural economies as crop purchases from 246,000 smallholder farmers and salaries for 4,700 full-time workers. Incentives are tiered to reward loans to businesses that create economic opportunities for women and youth, contribute to food security and nutrition in Africa, and practice climate-smart agriculture that sustains the environment.
“The Dutch Ministry of Foreign Affairs is committed to supporting Aceli Africa in its innovative approach to improve access to finance for agri-SMEs in East Africa. We expect Aceli Africa’s data-driven model will incentivize more lending for agri-SMEs and contribute to sustainable economic development in East Africa,” said Ms. Saskia Jongma, Deputy Director, Sustainable Economic Development Department, Dutch Ministry of Foreign Affairs.
‘’The British High Commission in Dar es Salaam is pleased to partner with Aceli Africa to support increased investment into Tanzania’s small and medium sized enterprises. Increasing access to growth capital will drive innovation, increase firm productivity, and create jobs for Tanzania’s rapidly growing workforce,’’ said Kemi Williams, Development Director, British High Commission in Dar es Salaam.
“The commitments by Aceli’s anchor funders are the catalyst for a more competitive lending market that will improve livelihoods for over 1 million farmers and workers and demonstrate a model that can be scaled in East Africa and replicated in other regions,” said Brian Milder, CEO of Aceli Africa.
More information on Aceli Africa’s approach and progress to date can be found in its newly-released Year 1 Learning Report.