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    Signature(s)

    Amount
    € 5,000,000
    Countries
    Sector(s)
    Malawi : € 5,000,000
    Credit lines : € 5,000,000
    Signature date(s)
    30/11/2021 : € 5,000,000

    Summary sheet

    Release date
    25 June 2021
    Status
    Reference
    Signed | 30/11/2021
    20210514
    Project name
    Promoter - financial intermediary
    KULIMA - RISK SHARING FACILITY FCB MALAWI
    FIRST CAPITAL BANK PLC
    Proposed EIB finance (Approximate amount)
    Total cost (Approximate amount)
    EUR 5 million
    EUR 20 million
    Location
    Sector(s)
    Description
    Objectives

    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.

    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.

    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. 

    Environmental aspects
    Procurement

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

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

    Disclaimer

    Before financing approval by the Board of Directors, and before loan signature, projects are under appraisal and negotiation. The data provided on this page is therefore indicative and cannot be considered to represent official EIB policy (see also the Explanatory notes).

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