MICROCAPITAL BRIEF: Canada, African Development Bank (AfDB) Announce $78m for Lending to Gender-inclusive, Climate-resilient Agricultural SMEs

Global Affairs Canada, an agency of the Canadian government, recently announced a contribution of CAD 100 million (USD 78 million) to the African Development Bank (AfDB), a multilateral institution that works to alleviate poverty in Africa, to support small and medium-sized agri-food enterprises (agri-SMEs) that are run by – or otherwise particularly beneficial to – women. The program, which is named the Agri-SME Catalytic Financing Mechanism (ACFM), is designed to support agri-SMEs that are “climate-resilient” and contribute to gender equality by providing “concessional finance and technical assistance to agribusinesses, financial institutions and impact funds.”

The funding is part of Canada’s International Assistance Innovation Program (IAIP), which is a five-year pilot program established in 2020 with a budget of CAD 935 million (USD 735 million) to create private sector growth in accordance with the UN’s Sustainable Development Goals. Potential partners may attain IAIP loans, guarantees, equity, non-repayable grants or contributions if they pass various screening processes which aim to select ventures that promote gender equality and contribute positively to environmental quality.

AfDB Group was founded in 1964 and provides loans and grants to governments and private companies in Africa. It consists of three entities, AfDB, the African Development Fund and the Nigerian Trust Fund. Owned and funded by its member governments, the bank has a mandate to reduce poverty and promote sustainable development. As of December 2021, AfDB reported assets of XUA 36 billion (USD 27billion), having disbursed loans totaling XUA 1.6 billion (USD 1.25 billion) during the year.

By Ben Greissman, Research Associate

Sources and Additional Resources

Canadian government press release
https://www.canada.ca/en/global-affairs/news/2022/05/canada-makes-major-contribution-to-support-small-and-medium-sized-agri-food-enterprise-growth-in-africa.html

About Canada’s IAIP
https://www.international.gc.ca/world-monde/funding-financement/iaip-piai.aspx

AfDB homepage
https://www.afdb.org/

AfDB financial report 2021
https://www.afdb.org/en/documents/financial-report-2021

Previous MicroCapital article on AfDB
https://www.microcapital.org/microcapital-brief-african-development-bank-afdb-joins-nasdaq-sustainable-bonds-network-with-10-listings-including-fight-covid-19-social-bond/

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