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Fund for African Private Sector Assistance approves three projects to spur SME development in Africa
Donors to the Fund for African Private Sector Assistance (FAPA) – consisting of the African Development Bank, the Government of Japan and the Government of Austria – have approved three catalytic projects totaling US $2,480,000 to stimulate the growth of Africa’s small and medium enterprises.
These grants will help strengthen the participation of Africa’s SMEs in financial markets and the agriculture sector.
“These three projects are well aligned with FAPA’s core mandate of supporting private-sector development in Africa, a key strategic priority of the African Development Bank. They augur well for job creation in Africa,” said Olivier Eweck, Director of the Syndication, Co-financing and Technical Solutions Department at the African Development Bank, and Chair of the FAPA Technical Committee.
With a FAPA grant of US $980,000, the first project – the Regional Financial Market Development Support Project (Projet d’appui au développement du marché financier regional, PADMAFIR) – will contribute to the modernization of the regulatory framework to increase competitiveness and strengthen the capacity of the regulator on new products, including securitization, diaspora bonds and green bonds. The grant will facilitate SMEs’ access to stock market funding and train commercial stakeholders to enhance professionalization. PADMAFIR is part of a long-term and ongoing multi-stakeholder partnership to develop the Regional Financial Market (stock exchange) of the West African Monetary Union (WAMU).
The second project is for the Promotion of Factoring in Africa, through which an investment totaling US $500,000 is deployed to finance the capacity-building of emerging factoring firms and the development of a sustainable knowledge and learning platform. The platform will provide capital to SMEs by financing their receivables. The African Export-Import Bank (Afreximbank) will contribute US $450,000 towards this technical assistance project.
The third project is a grant of US $1,000,000 for leveraging investments for fertilizer utilization amongst smallholder farmers in Africa. It will help increase the affordability, accessibility and incentives for fertilizer use among smallholder farmers in Africa and expand the supply and distribution of fertilizer by leveraging investments. It is also intended to create over 1,000 jobs for women and youths. The African Fertilizer and Agribusiness Partnership will match the FAPA grant on a 1:1 basis.
“We look forward to providing further FAPA grants that will unlock business possibilities for Africa’s SMEs,” Eweck said.
Since its launch in 2006, FAPA has received donor contributions exceeding US $85 million and helped finance over 80 technical assistance projects, thereby making a significant contribution to SME development in Africa.
The Fund for African Private Sector Assistance (FAPA), is a multi-donor trust fund that provides grant funding for technical assistance activities to public and private sector entities domiciled in Africa. FAPA resources are utilized to promote innovative programs that specifically support the development of SMEs in Africa. FAPA is one of the components of the Enhanced Private Sector Assistance (EPSA) initiative hosted at the African Development Bank.