Incofin to manage €40m liquidity facility for smallholder farmers

Incofin, together with KfW and the German Ministry BMZ, have launched an emergency liquidity facility to give smallholder farmers in developing countries breathing space.

German Development Minister Gerd Müller announced the launch of the Agri-Finance Liquidity Facility (ALF), a new initiative of the ministry with Incofin and German bank KfW.

The ALF is a debt facility investing in sustainable agri-enterprises in mainly Africa and Latin-America, funded by KfW/BMZ and managed by Incofin as the alternative investment fund manager.

With a size of €40 million, the facility will support actors in the sustainable agri-food value chain in developing and emerging countries to maintain their operations during and after the Covid-19 crisis. The capacity for investments has been extended to other agri-finance lenders and their investees in order to be as broad and inclusive in its impact as possible.

To offset the pandemic’s negative impacts on the sustainable agricultural production sector, KfW approached Incofin to develop a proposal for an emergency liquidity facility initially targeted for investees of the Fairtrade Access Fund (FAF). After reviewing the proposal, it was jointly decided to expand the focus of the facility to other agri finance lenders, principally members of the CSAF (Council on Smallholder Agricultural Finance), and their investees to be as broad and inclusive in its impact as possible. This will allow the facility to be as much inclusive as possible and to generate further impact.

Covid-19 disrupted global food systems, testing the resilience of farmers who already receive the least value for their contributions to agri-food value chains. Many farmers, forced to harvest with significantly reduced personnel, lost quality and volumes of their crops.

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