$14M Investment Kicks Off $200M African Smallholder Finance Initiative

The Global Agriculture and Food Security Program (GAFSP) has approved a $14 million first allocation to the African Development Bank (AfDB) as part of a broader $200 million private-sector financing initiative targeting smallholder farmers across Africa. The announcement marks the launch of the Business Investment Financing Track (BIFT), a program blending GAFSP grants, concessional financing, and multilateral development bank investments to unlock private-sector capital for agriculture.

Launched in 2024, BIFT aims to channel investment to farmers, food producers, agribusinesses, and startups, beginning in Ethiopia, Uganda, Tanzania, Malawi, and Zambia. The initial allocation will establish the Agro Inputs Risk Sharing Facility (ARSF), designed to help smallholders access essential agricultural inputs and technical assistance. The facility consists of a $10 million tranche of de-risking capital and $4 million in grants for technical support.

“This first allocation demonstrates the appetite for funders to work together in this new model to solve an age-old challenge of finance for smallholder farmers: risk,” said Natasha Hayward, program manager at GAFSP. “By blending donor funds with multilateral and commercial finance, every program dollar leverages much more in private investment, increasing food security and resilience to climate shocks.”

Smallholder farmers often struggle to obtain credit due to perceived agricultural risks. ARSF, administered by the African Trade & Investment Development Insurance, will provide portfolio guarantees to local banks, encouraging loans to agro-input businesses and cooperatives. The program is expected to directly benefit over 1.5 million farmers and 500 intermediary agro-dealers and cooperatives, improving access to certified seeds, fertilizers, soil enhancers, and mechanization tools.

“By targeting agro-input dealers and smallholder farmers, this facility strengthens the entire value chain, from input supply to market access,” said Philip Boahen, lead for partnerships and coordination at the AfDB. “With the establishment of ARSF, we are planting the seeds of a more food-secure Africa.”

The initiative aligns with Africa’s commitments under the Comprehensive Africa Agriculture Development Programme (CAADP) and the Kampala Declaration on Accelerating Africa’s Food Systems Transformation, adopted in 2025. By reducing financing barriers for agribusinesses, ARSF supports the continent’s broader goals of ending hunger, reducing poverty, and enhancing resilience to environmental pressures.

As the first allocation under BIFT, this $14 million investment lays the groundwork for scaling de-risking models that combine public and private resources. Future phases aim to expand into additional low-income countries, unlocking further private-sector funding to strengthen food security across the Global South.