Key Takeaways:
- The African Development Bank (AfDB) secures $14 million from the Global Agriculture and Food Security Program (GAFSP)
- Funding will establish the Agro Inputs Risk Sharing Facility (ARSF) to catalyze $200 million in private-sector lending
- The initiative targets smallholder farmers and agro-dealers in Ethiopia, Uganda, Tanzania, Malawi, and Zambia
- ARSF will provide risk-sharing guarantees to increase access to finance for agribusinesses
- The project aligns with the African Union’s food systems transformation goals and the Kampala Declaration
African Development Bank leads new financing initiative for smallholder agriculture
The African Development Bank (AfDB) has received a $14 million allocation from the Global Agriculture and Food Security Program (GAFSP), marking the first investment under GAFSP’s Business Investment Financing Track (BIFT). The funding aims to unlock up to $200 million in private-sector lending for smallholder farmers, producer groups, and agribusinesses in Africa’s low-income countries.
The initiative, hosted by the World Bank through GAFSP, blends donor grants and concessional finance to attract private investment to the agricultural sector. It targets the financing challenges smallholders face, where limited access to credit and insurance continues to constrain productivity and resilience.
Agro Inputs Risk Sharing Facility to de-risk private lending
The new Agro Inputs Risk Sharing Facility (ARSF), backed by the African Development Bank, will deploy a $10 million tranche of de-risking capital and up to $4 million in technical assistance grants. Administered by the African Trade & Investment Development Insurance, the facility will provide portfolio guarantees to participating financial institutions, enabling them to extend credit to agribusinesses traditionally viewed as high-risk.
“The African Development Bank’s leadership in implementing this facility is key to addressing financing bottlenecks for smallholder farmers,” said Natasha Hayward, Program Manager for GAFSP. “By blending GAFSP donor funds with multilateral and commercial finance, every program dollar will leverage many more in private investment.”
Strengthening resilience and food security in five African countries
Through the African Development Bank’s coordination, the Agro Inputs Risk Sharing Facility will support over 1.5 million smallholder farmers and 500 intermediary agro-dealers in Ethiopia, Uganda, Tanzania, Malawi, and Zambia. The facility will increase access to certified seeds, organic fertilizers, soil enhancers, and mechanization tools, helping farmers manage the impacts of heat, drought, and other environmental stresses.
Philip Boahen, Lead for Partnerships and Coordination at the African Development Bank Group, stated, “By targeting agro-input dealers and smallholder farmers, this facility intends to strengthen the entire value chain, from input supply to market access, building food systems able to withstand market shocks.”
Supporting Africa’s long-term agricultural transformation
The African Development Bank’s initiative aligns with Africa’s broader commitments to sustainable food systems transformation under frameworks such as the Comprehensive Africa Agriculture Development Programme (CAADP) and the Kampala Declaration, adopted by African Heads of State in 2025.
This allocation represents the foundation for a scalable financing model that leverages blended capital to mobilize private investment, enhance food security, and build climate resilience across Africa. Future phases will build on the success of the African Development Bank’s leadership in agricultural transformation, expanding the model to other low-income countries to further strengthen the continent’s food systems.
