Bridging the gap: multibillion-dollar FASA fund to finance agri-SMEs in Africa

Norway, South Korea, the United Kingdom, and the United States have officially launched a multi-donor “fund of funds”, known as FASA, whose aim is to address the financing challenges faced by agricultural small and medium-sized enterprises (agri-SMEs) across Africa.

Over the next 10 years, the “Financing for Agricultural Small and Medium Enterprises in Africa” Fund, or FASA, aims to support 500 agri-SMEs and 1.5 million smallholder farmers across the continent, which together constitute Africa’s largest employer and economic engine, ultimately benefiting 7.5 million people while bolstering nearly 60,000 jobs.

Although they produce 80% of Africa’s locally consumed food and generate a quarter of the continent’s rural employment, agri-SMEs face an estimated $100 billion lending gap, according to a recent analysis. FASA Fund aims to address this gap with an ambitious, targeted approach.

Operating as a fund of funds, its mission is to finance and empower investment funds dedicated to agricultural SMEs across the continent. By leveraging FASA’s catalytic capital, the funds will attract additional investment, broadening financial access for a larger number of SMEs. It will also support the funds to strengthen their gender and climate-lens throughout their investment cycle and fund structuring. To achieve this objective, FASA will actively invest in climate adaptation; gender equality; crop diversity to better withstand shocks from pests, weather, and disease; and regenerative agriculture practices that integrate conservation efforts and restore soil health.