It said FAFIN used a unique value chain-centric approach, a combination of equity, quasi-equity and convertible loan instruments to provide loan for SME s.
According to it, FAFIN implements its strategy and constructs its portfolio through a bifocal lens consisting of the twin objectives of competitive financial returns and measurable positive social impact.
The Fund is jointly sponsored by the German KfW Development Bank and the Government of Nigeria, through the Federal Ministry of Agriculture and Rural Development (FMARD).
The Fund Manager is Sahel Capital (Mauritius) Limited, a fund management firm incorporated in Mauritius in 2013. The project is expected to deliver strong development outcomes from household benefits and employment through the creation of a large number of jobs and the provision of agric products.
It also said this would bring about positive gender and social effects through the implementation of out-grower schemes and supporting rural development and private sector development.
It said through alleviation of financial constraints faced by agribusinesses, this would enhance agricultural value chains.
“The project’s contribution to inclusive growth is expected to be significant, given the large numbers of jobs to be created and out-growers to be reached at the level of sub-projects,’’ the statement explained.
Its contribution to green growth is expected to be low, because the Fund targets the agribusiness sector with some expected negative effects on the environment.
The Fund’s primary focus will be on SMEs across the agric value chain with crop value chain and geographic diversification. It aims at fixing broken value chains to increase efficiencies, reduce post-harvest loss, and increase smallholder farmer incomes and SME agribusiness profitability.
Investment instruments will be primarily quasi-equity (convertible bonds, preference shares and structured royalties) and direct equity. The ticket size ranges from $500, 000 to $5 million.
