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[PR] The European Investment Bank grants a €5 million support to FEFISOL II for the financing of the agricultural sector in Africa
Following the success of FEFISOL, the first impact fund dedicated to the rural world in Africa, which closed in 2021, its two founders, SIDI and Alterfin, have been actively working on the creation of a new fund: FEFISOL II, created at the end of 2021.
Today, the EIB announces EUR 5 million support for the European Solidarity Financing for Africa Fund, FEFISOL II! This renewed commitment will allow the Fund to pursue and deepen its social mission.
FEFISOL 1 had a considerable impact over the past decade:
– 86M euros disbursed, of which 93% in SubSaharan Africa;
– 75% of average outstanding in local currencies;
– 92 customers financed in 25 countries;
– 139 technical support projects carried out with 51 customers.
FEFISOL II will extend the successful support provided by FEFISOL I to rural microfinance and the agricultural sector. The challenge posed by the lack of financing for rural areas in Africa and for smallhorders in particular remains crucial.
In Africa, less than 5% of formal financial institution’s disbursed loans are dedicated to the agricultural sector and less than 10% of farmers have access to formal credit. At the same time, roughly 48% of the population depends on agriculture. While being a major contribution to a lot of African economies, the agricultural sector is still financially underserved because it is often perceived as too risky or not profitable enough.
Rural communities face multiple challenges: financing, but also the increasing risks induced by climate change, as well as women’s financial inclusion: they represent 60% of the Africa’s agricultural workforce, yet they rarely benefit from the same rights than men.
FEFISOL II was structured to support solutions designed locally to address these issues. FEFISOL II will be implemented in more than 25 countries in Sub-Saharan Africa and is expected to support 130 microfinance institutions and fair-trade/organic certified agricultural companies and cooperatives.
Additional investors in FEFISOL II are currently finalising their investment for a first closing by end of March 2022: the first investments will be effective from May!