The Social Enterprise Fund for Agriculture in Africa has been launched by Sahel Capital, a fund manager and advising organization (SEFAA).
The German development bank KfW is the sponsor of the US$24 million fund.
SEFAA is a poverty-reduction impact fund that invests in social agricultural enterprises (SAEs) that significantly improve the business eco-system, or income opportunities, of smallholder farmers (SHFs) in Sub-Saharan Africa.
SEFAA is intended to create and preserve jobs, as well as achieve six of the United Nations Sustainable Development Goals, in addition to its targeted aim of reducing poverty through its investments (SDGs 1, 2, 3, 4, 5, and 6).
Sahel Capital will invest in SAEs across the agricultural value chain, with a particular focus on enterprises or intermediaries that help SHFs increase productivity, address market access issues or information gaps, or provide agricultural financing tailored to their specific needs and production cycles.
KfW has long been a strong supporter of agricultural development on the African continent, having anchored several other funds such as the Africa Agriculture and Trade Investment Fund (AATIF), the Fund for Agricultural Finance in Nigeria (FAFIN), and the Lending for African Farming Company over the last eight years (LAFCo).
Since its inception in 2010, Sahel Capital has invested in and built SME agribusinesses across seven agricultural value chains, raising its first US$65.9 million Fund for Agricultural Finance in Nigeria (“FAFIN”) in 2014 (final close in 2017).
SEFAA will largely invest in debt (with the option of investing some stock or quasi-equity) to bridge the financing gap for early-stage businesses that aren’t yet established or successful enough to attract equity and/or debt from commercial capital sources.
“We are thrilled to be selected as investment adviser to SEFAA and appreciative to KfW for its continuing support and dedication to our shared aim of fostering growth in this crucial sector,” Mezuo Nwuneli, Managing Partner at Sahel Capital, said on the final close of SEFAA.
“As we combine existing sector expertise, a vast network, and regional connections to expand our investment footprint outside Nigeria into West, East, and Southern Africa, we are enthusiastic about this next step in the firm’s evolution.”
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