MALAWI – First Capital Bank, a commercial bank in Zimbabwe has partnered with European Investment Bank (EIB), to provide EUR 12. 5 million (US$14.19m) investment boost for smallholder farmers and agricultural companies and cooperative across Malawi.
The project, backed by European Union support, is aimed to transform access to finance for agricultural businesses across Malawi, strengthened by technical assistance to identify, assess and monitor agri-food value chain investment and develop new financial products.
The impact of the new financing will be enhanced by both specialist best practice agricultural investment technical assistance and European Union contribution of EUR 5 million (US$5.6m) to support further long-term agricultural financing.
This will enable an increased contribution by smallholder farmers to national agricultural production and exports.
Further to that, the initiative has been launched to address specific challenges holding back agricultural investment and is part of the broader “Kulima – promoting farming in Malawi” programme developed by the European Union and Government of Malawi.
“Increasing high impact agricultural investment is crucial for Malawi. This new partnership between First Capital Bank, the European Investment Bank and the European Union will benefit thousands of small holder farmers across our country and unlock economic opportunities from sustainable agriculture in the years ahead,” said Agness Jazza First Capital Bank, Deputy Chief Executive Officer.
By forging the partnership, First Capital Bank joins ECOBANK Malawi, and together the two leading local institutions will provide a total of €50 million of new financing for agricultural investment.
Agriculture value chain companies across Malawi will be able to access loans with maturities of up to 7 years, longer than commonly available in the market to expand, upgrade and modernise their equipment, and unlock new business opportunities.
“The European Investment Bank recognises the importance of agriculture for both economic activity and social development. This latest partnership with First Capital Bank will unlock investment by smallholders across Malawi facing challenges of climate change and the COVID-19 pandemic.
“The EIB is pleased to support this visionary Team Europe Kulima initiative that tackles barriers to agricultural investment,” said Thomas Östros, European Investment Bank Vice President.
The new agriculture access to finance cooperation was confirmed in Brussels by EIB President Werner Hoyer ahead of the EU-Africa Summit.
“Team Europe is working with Malawian partners to transform opportunities in rural communities. Today First Capital Bank, the EU and the EIB, are joining forces to boost agricultural investment in a pioneering initiative that is a model for Africa,” said Aurélie Valtat, Chargé d’affaires of the Delegation of the European Union to Malawi.
EU supports bee keeping in Tanzania
Meanwhile in Tanzania, the European Union (EU) is availing 10 million euros in grants to tweak the beekeeping value chain across the East African nation.
The five-year project will specifically benefit beekeepers in seven regions of Tanzania Mainland and two more in Zanzibar Island, targeting to support over two million Tanzanians who are employed in the entire beekeeping value chain.
The EU-funded programme is expected to raise honey production from current 31,000 tonnes to 138,000 tonnes per year, targeting the European market.
The investment will go towards improving production systems for bee products and fine-tuning processing and value-addition facilities.
The project is set to also empower the Arusha-based Njiro Wildlife Research Institute by availing working equipment at the Institute’s beekeeping laboratory. This will enable researchers to work effectively.