What's Happening?
Sahel Capital's Social Enterprise Fund for Agriculture in Africa (SEFAA) has received a $10 million investment from the Mastercard Foundation Africa Growth Fund. This investment aims to support agricultural small and medium-sized enterprises (agri-SMEs) across sub-Saharan Africa. The fund, launched in 2021 with initial support from KfW Development Bank, addresses the financing gap for agri-SMEs that are too large for microfinance but too small for commercial banks. With Mastercard's backing, SEFAA plans to expand its reach to 13 African countries, creating over 10,000 jobs for women and youth. The fund has already processed 33 facilities for 18 companies across seven countries.
AD
Why It's Important?
The investment is significant as it aims to strengthen Africa's food systems by supporting agri-SMEs, which are crucial for providing inputs, processing, logistics, and distribution. This initiative is expected to enhance food security, rural employment, and resilience against climate change. The Mastercard Foundation's involvement highlights a strategic focus on agriculture as a driver for inclusive growth, aligning with its mandate to unlock catalytic capital for high-potential enterprises. The investment also underscores growing investor confidence in Africa's agricultural sector, which employs over 60% of the continent's workforce.
What's Next?
The challenge for SEFAA and its partners is to effectively execute their plans amidst climate volatility, infrastructure gaps, and policy inconsistencies in Africa. With the right financing and technical support, agri-SMEs have the potential to unlock significant economic opportunities. For Mastercard Foundation, this investment aligns with its Young Africa Works strategy, aiming to enable 30 million young Africans to secure dignified work by 2030.
Beyond the Headlines
The investment model not only provides financial support but also includes technical assistance to ensure long-term sustainability. This approach aims to build ecosystems that can sustain growth, offering improved productivity and market access for farmers, and creating jobs and entrepreneurial opportunities for women and youth.
