Aceli Africa Year 1 Loan Data

Published 13 December 2021

The Swiss Agency for Development and Cooperation (SDC) profiles Aceli approach to incentivizing lending to agricultural small and medium enterprises in East Africa, key insights and results to date, and opportunities for the model to be applied to other markets.

Read the SDC case study here.

 

Women form a majority of the agricultural workforce in East Africa as farmers and employees in agricultural value chains, but there is a vast gender gap in economic opportunities across the sector. Similar gaps persist at the level of senior management, board, and business ownership, where women entrepreneurs struggle to access capital relative to their male counterparts.

Overcoming these disparities will require a range of interventions from policy changes to shifts in cultural norms around gender roles. While no single actor can tackle these alone, it is essential that every actor aiming to build a more prosperous African agriculture sector – or a thriving economy more broadly – integrate gender inclusion into their strategy.

Our new Learning Brief highlights:

  • Aceli’s Approach to Gender Inclusion: Our experience adapting the 2X Criteria to lending for agri-SMEs in East Africa
  • Our Data: Learning from our first 22 months of offering impact-linked financial incentives for lenders
  • The Opportunity Ahead: Actions that Aceli and our partners are taking to close the economic opportunity gap for women, and outstanding questions for further exploration

Read it here

There are many well-documented barriers to agri-SME finance: risk aversion on the part of lenders, lack of collateral on the part of SMEs, and weak infrastructure, among many others.

The Aceli team, led by Head of Financial Sector Andrew Ahiaku, has recently delved into a set of barriers that is not commonly discussed: Central Bank regulations.

These highly technical policies and the ways in which regulated financial institutions interpret them are key drivers of the agricultural credit gap. Our new Learning Brief on this topic draws upon our review of the literature, conversations with more than 70 practitioners in East Africa, and the experiences of our team from the perspective of both lending and borrowing.

Read it here

Amid the ongoing challenges posed by COVID-19 and climate change—compounding the finance gap that pre-dated both—the need for investment in the African agriculture sector is more urgent than ever.

Aceli’s experience in Year 1 indicates that there is growing interest from private sector lenders to expand their agriculture portfolios. See here for a deeper data dive into Aceli-supported loans to date.

With new commitments from the Dutch and UK governments, Aceli has now secured $62M in funding through 2025 to scale up our activities.

Our latest report distills learning from our first year of implementation and highlights three key areas for learning in the years ahead:

  • How can public & philanthropic resources be targeted most effectively to attract private sector investment?
  • How can private investment be steered to optimize social & environmental impact, and what meaningful measures can we use to assess progress toward this goal?
  • How can the learning from Aceli’s model build an evidence base for blended finance that can spur adoption at the country level and replication in other sectors & geographies?

Click here to download the Learning Report.

At a sector convening in December 2017, lending practitioners discussed barriers to growing the finance market for agricultural SMEs: namely, the mismatch between the risk-return hurdle of capital providers and the addressable demand among businesses. Stakeholders in attendance pushed lenders to put hard evidence behind their anecdotal experiences.

This report synthesizes our journey over the past two and half years: first to distill the economics of agri-SME lending across a diverse set of lenders and then to design solutions to bridge the gap – estimated at $65 billion a year across Sub-Saharan Africa – between capital supply and demand for agri-SMEs.

In partnership with Dalberg Advisors and with funding from 12 donors, we reviewed data from 31 lenders on 9,104 transactions totaling $3.7 billion and also conducted in-depth interviews with lenders, technical assistance providers, and many other ecosystem actors.

This report shares our findings and presents Aceli Africa’s new data-driven, marketplace approach to align capital supply and demand and unlock increased financing for agri-SMEs.

Download the summary and full report below:

>> Summary Report

 

>> Full Report

 

 

The data in this document reflect the loans supported by Aceli’s financial incentives from September 2020 – October 2021.

Download the data.