- New initiative to strengthen access to finance, support job creation and enhance agricultural productivity
- Malawi leading targeted European Investment Bank support for sustainable agriculture investment in southern Africa
- Impact strengthened by agriculture and financial best-practice technical assistance
Smallholder farmers and rural cooperatives across Malawi will benefit from a new EUR 25 million long-term financing scheme to accelerate agricultural investment launched in Lilongwe earlier today.
The commitment of the European Union under the Kulima Agriculture support programme and details of the European Investment Bank’s first cooperation with First Capital Bank, through a new EUR 12.5 million credit line supporting EUR 25 million of new investment, were unveiled by Minister of Agriculture Lobin Lowe, MP, First Capital Bank CEO Spyridon Georgopoulos and Thomas Östros, Vice President of the European Investment Bank visiting Malawi during his first official visit to southern Africa.
“Agriculture is central to social and economic life in Malawi. The new targeted investment launched by the European Investment Bank and First Capital Bank today will accelerate priority investment in rural communities and by agricultural businesses across our country creating jobs and unlocking new opportunities. Malawi is pioneering a model for agricultural investment that can benefit Africa.” said Minister of Agriculture Lobin Lowe, MP.
“First Capital Bank is committed to building on our track-record of supporting agriculture across Malawi by improving access to finance, sharing best practice and innovation to unlock investment across the sector. First Capital Bank is pleased to join forces with the European Investment Bank to roll out Team Europe’s dedicated support for agriculture in our country. This new partnership will unlock agricultural investment, create employment and unlock economic growth in Malawi in the years ahead.” said Spyridon Georgopoulos, Chief Executive Officer of First Capital Bank.
“Agriculture is crucial for economic activity and social development in rural communities across Malawi. The European Investment Bank is pleased to work with First Capital Bank to enabling smallholders and agriculture companies to invest through increased access to finance under this new EUR 25 million scheme. The first ever Team Europe cooperation between the European Investment Bank, European Union and First Capital Bank, will unlock a better future and create employment opportunities throughout the sector and be supported by sharing best-practice agricultural, gender and financial expertise. Together Team Europe and First Capital Bank are ensuring that smallholders can better tackle recent drought and extreme rainfall and can expand business and create opportunities and have a more secure future in the years ahead. The new Malawi initiative follows the successful launch of Team Europe recent support for agricultural investment in Malawi, Zambia, Zimbabwe and Kenya and we look forward to launching similar schemes elsewhere in Africa.” said Thomas Östros, European Investment Bank Vice President.
“Today Malawi and Team Europe are marking a new milestone in delivering a better future and more climate resilient future for agricultural communities across this country. The European Union is pleased to support the Kulima programme that is unlocking transformational investment across the agricultural sector here in Malawi and across southern Africa” said Ambassador Rune Skinnebach, Head of the European Union Delegation to Malawi.
The financing scheme will be managed by First Capital Bank and is backed by the European Union and European Investment Bank, as part of the broader Team Europe support for sustainable commercialisation of smallholder farmers across Malawi and southern Africa..
The latest targeted support for agriculture in Malawi by the European Investment Bank, the world’s largest international public bank, will improve agricultural productivity, upgrade agricultural processing, and support a sector severely impacted by COVID-19 challenges and is supported by a best-practice assistance program.
At the Lilongwe launch the national importance of unlocking agricultural investment for Malawi, by improving access to long-term financing, was further highlighted by Spyridon Georgopoulos First Capital Bank Chief Executive Officer. He announced detailed of the new targeted support for agricultural investment and confirmed the engagement of First Capital Bank teams across the country to roll-out the new initiative.
Supporting investment by Malawian farmers and businesses during challenging times
The new financing will provide longer-term loans than normally available in both local and foreign currency. The scheme will be complemented by a European Union support programme including technical assistance, to support agricultural companies across Malawi. Access to finance by small holders and agricultural companies will be further enhanced by a risk-sharing facility backed by the European Union.
The 7 year EUR 12.5 million EIB loan to First Capital Bank in combination with the risk-sharing facility that was arranged with the strong support of the EU Delegation in Malawi and the European Commission, will allow EUR 25 million of new financing to be provided to small holders and private companies involved in agriculture across Malawi.
The new financing will allow longer average loan tenors for business loans and enable companies to better reflect the economic life of new investment.
Under the initiative, First Capital Bank will provide financing in Malawian Kwacha, USD and EUR to eligible clients that will unlock investment that strengthens the overall competitiveness of Malawian agriculture.
Strengthening impact and opportunities for women through sharing best practice
The impact of the new EUR 25 million agricultural financing provided through First Capital Bank will be enhanced through best-practice shared under a dedicated technical assistance and training programme.
The Frankfurt School of Finance & Management, will support First Capital Bank in further strengthening their agricultural lending capabilities and enabling agricultural companies led by women and female smallholders to better access the new financing.
The technical assistance program will also support share inclusive and sustainable business practices to ensure that investment by smallholders contributes to poverty reduction, improved food security and more competitive and inclusive agricultural value chains.
Latest high-impact EIB engagement in Africa
The EIB has supported private and public investment across Malawi since 1978, including support for transformational water, energy and transport projects, alongside financing business growth.
The European Investment Bank is the world’s largest international public bank, owned directly by the 27 European Union member states. Over the last five years the EIB has provided EUR 18 billion for private and public investment across Africa.
Background information
EIB Global is the EIB Group’s new specialised arm dedicated to increasing the impact of international partnerships and development finance. EIB Global is designed to foster strong, focused partnership within Team Europe, alongside fellow development finance institutions, and civil society. EIB Global brings the Group closer to local people, companies and institutions through our offices across the world.