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French investor SIDI closes its new fund dedicated to agricultural structures in Africa at $24 million

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(Agence Ecofin) – After the first Fefisol fund, which closed in July 2021, SIDI is setting up a new European fund, Fefisol II, which will invest in 110 microfinance institutions and agricultural cooperatives in 28 African countries.

The French investment firm Solidarité internationale pour le développement et l’investissement (SIDI) recently announced the first closing at 22 million euros (around $23.4 million) of its new European fund, Fefisol II. Managed by the Belgian asset management company, Inpulse, this new vehicle is dedicated to financing rural microfinance and small African family farms.

The fund will invest in 110 microfinance institutions and agricultural cooperatives in 28 African countries. “Fefisol II is designed to help meet the crucial challenges of financing vulnerable populations in rural areas in Africa and more particularly the financing of the agricultural sector”, SIDI said in an official note.

Before structuring this new vehicle, the structure had launched a first Fefisol fund, closed in July 2021. This had raised 86.5 million euros in financing, and 93% of this amount was invested in sub-Saharan Africa. In total, 92 customers were financed by this vehicle in 25 countries, and 139 technical support projects were carried out with 51 customers.

In addition to SIDI and the Belgian cooperative Alterfin, which contributed 4.8 and 2 million euros respectively to Fefisol II, 7 other institutions entered its capital, including the EIB (European Investment Bank) and Proparco, which each invested 5 million euros, or the Belgian investment company for developing countries, BIO, and the Swiss alternative bank Bas.

Fefisol II will offer diversified financial products in 12 to 15 local currencies, in order to reduce exchange risks. Its financial support will be accompanied by technical assistance, for the benefit of the beneficiary structures.

Currently in Africa, less than 5% of loans disbursed by traditional financial institutions are intended for the agricultural sector, and less than 10% of farmers have access to credit. However, the agricultural sector represents 23% of the continent’s GDP and 55% of jobs.

Nearly 60% of the sub-Saharan population lives in rural areas, and family farming plays a major role in terms of value production and employment within the African agricultural sector.

Chamberline MOKO

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