Over 10,000 farmers to benefit from US $ 10 Million investments to boost value chain development in Malawi
The Africa Leasing Group (portfolio managers), Stansfield Motors Limited (technical partners) and the New Finance Bank (NFB) (financier) have signed a four-year Letter of Intent with Grow Africa, representing investments of over US $ 10 Million in Malawi. This is a blended finance model, where NFB shall provide financing to smallholders guaranteed by Stanfield Motors. Grow Africa is now in discussion with non-commercial partners to expand the guarantee/ risk fund to unlock further financing from NFB.
Largely an agricultural country, 84 per cent of Malawians live in rural areas with about 11 million people engaged in smallholder subsistence farming. Agriculture accounts for more than one-third of GDP.
The investment will directly benefit 10,000 rural farming families by helping fight hunger, create decent jobs, reduce poverty and promote gender balance and youth participation in the country. It will also focus on research and development in value chain optimization, capacity building and the set-up of a credit facility with a maximum debt worth US $ 1, 333 per hectare.
The initiative is part of the Commercial Agriculture Support Services efforts to promote multi-stakeholder collaboration to advance private sector investment aligned to the Government of Malawi’s agricultural development objectives. The blended finance model aims to achieve leverage and impact, while allowing private sector partner financiers to receive reasonable returns.
The expected impact of the investment is:
- Reduction of poverty, zero hunger and access to decent work and economic growth to 10, 000 rural farmers;
- 100 SME agro-dealers developed through primary agriculture with state of the art technology and qualified agronomists;
- 20,000 ha developed for irrigation of export crops;
- 80,000 tonnes of legumes for export;
- US $ 80 Million in export earnings realized annually and a total of US $ 320 Million cumulatively for the next four years.