Small Foundation is excited to announce the launch of Emerald Africa Financing Facility (EAFF), an initiative supporting agtech digital innovators enabling greater access to finance for rural SMEs. EAFF will offer loans of up to $250,000 to early-stage sub-Saharan Africa-focused agtech ventures.
Agtech ventures harness mobile technology, mobile payments, e-commerce platforms and increased data sharing to create innovative, sustainable business models capable of reaching rural customers, especially those living in poverty. By reaching more people more efficiently, agtechs have an important role in enhancing the resilience of rural communities in the face of climate change.
Despite this potential, agtechs face enormous challenges accessing appropriate capital to scale. Although venture capital has been flowing into the continent in recent years, only around 5% has been directed towards agtechs, and even less to models boosting access to credit to small and medium sized enterprises (SMEs).
Agtechs and agricultural investments are generally associated with high risk and there can be a lack of familiarity with innovative business models. EAFF addresses this challenge by offering debt financing to agtechs in Africa that have demonstrated potential for growth and impact. EAFF will lend to agtechs offering credit to their SME customers. The target agtech is an early-stage venture looking for funding to scale their on-lending loan book.
Conor Brosnan, Small Foundation CEO, said: “Having made equity investments in agtechs we have seen first-hand the need for credit to accelerate growth. We are excited to support EAFF and see how access to credit will enable agtechs to deliver more services and impact to underserved rural communities.”
Alex Simuyandi, Principal of EAFF, said “We are excited to be launching EAFF to meet the rising demand from digital innovators for access to finance. We have identified a critical credit need amongst early stage agtechs, and we hope that we can play a catalytic role in increasing the flow of funding to the sector. Agtechs will play an increasingly important role in supporting rural SMEs, improving resilience and contributing to a thriving rural ecosystem.”
EAFF is a two-year pilot within Small Foundation and will be managed by Alex Simuyandi and Abena Opoku-Acquah. For more information, please visit emeraldafrica.tech.
This article was originally published by Small Fundation