KULIMA - RISK SHARING FACILITY FCB MALAWI

Promoteur – Intermédiaire Financier

FIRST CAPITAL BANK PLC

Lieu

• Malawi

Description

Risk-sharing facility supported by a grant from the European Commission to provide guarantees to First Capital Bank Plc (Malawi) financing agri-food projects that engage smallholder producers in Malawi.

Additionality and Impact

Access to finance is one main market constraint in Malawi particularly for long-term financing. The proposed Risk Sharing Facility (RSF) and the complementary Kulima Access to Finance Facility (EIB credit line) bear a longer maturity than typically available in the market. This will support private sector development in the agriculture sector, one of the drivers of the country's economy, by reducing credit risk for financial intermediaries financing primary and secondary agriculture projects that contribute to the integration of smallholder farmers into the value chain. The RSF will allow the FI to reduce their commonly very high collateral requirements when lending, especially to SMEs active in the agri-food sector, and thereby allow provisioning of loans at improved conditions. The FI and final beneficiaries will further benefit from Technical Assistance focussed on a broad range of capacity building activities. The project is fully in line with EU and national development objectives, as sustainable agriculture is one of the three objectives of the National Indicative Programme 2014-2020, and the National Agricultural Policy aims to sustainably raise agricultural production and incomes. Overall, this cooperation with the counterparty will leverage additional EUR 12.5 million of finance to private agri-food value chain investments. 

Objectifs

This project will increase financing of agriculture value chain projects carried out by private sector enterprises through providing a risk-sharing facility to First Capital Bank Plc.

Secteur(s)

• Lignes de crédit - Lignes de crédit

Montant BEI envisagé (montant approximatif)

EUR 5 million

Coût total (montant approximatif)

EUR 20 million

Aspects environnementaux

Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.

Passation des marchés

Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.

Statut

Signé - 30/11/2021