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Boosting small and medium-sized enterprises and creating jobs for rural youth

In developing countries, millions of small and medium-sized enterprises (SMEs) don't have access to capital to grow their business. The unmet demand for financing from smallholder farmers is estimated at US$150 billion in sub-Saharan Africa, South and South-East Asia, and Latin America.

Another compelling challenge is the growing number of young people looking for work. Today’s young generation is the largest ever - estimated at 1.2 billion. A significant percentage of them live in rural areas. In Africa alone, 10 to 12 million young people enter the labour market every year. They need opportunities and an alternative to migration.

Investing in rural SMEs and agri-businesses is essential to spur productivity, improve incomes and livelihoods and importantly create jobs, in particular for the youth.

An innovative impact fund

IFAD initiated the ABC Fund as a private impact investment fund with support from the European Union, the Africa Caribbean Pacific Group of States (ACP), the Government of Luxembourg and the Alliance for a Green Revolution in Africa (AGRA). The Fund is managed by Bamboo Capital Fund with Injaro Investments Limited, as investment advisor.

This impact fund proposes an innovative approach for attracting much needed capital to rural areas in developing countries, with a particular focus on young people.

Once established, the ABC Fund provides loans and equity investments adapted to the needs of rural SMEs, farmers' organizations, agri-preneurs and rural financial institutions.

It specifically targets SMEs that struggle to access capital and financial services. The ABC Fund also places a particular focus on incubating enterprises led by young people.

The objective is to mobilise EUR 200 million from public and private investors over the next ten years. It is estimated that some 700,000 households would benefit from ABC Fund interventions. The EU/ACP have committed EUR 45 million, Luxembourg EUR 5 million and AGRA EUR 4.5 million to the fund.

The ABC Fund benefits from a unique pipeline of projects. Building on their unique portfolios of programmes, IFAD and AGRA work with the fund manager to identify attractive and impactful investments in promising SMEs. 

IFAD has 40 years’ experience in rural areas, an extensive field presence, a strong expertise with agri-businesses and local and national networks.


Related news

Innovative impact fund to create jobs for rural youth in developing countries

February 2019 - NEWS
An impact fund with an innovative approach for attracting much needed capital to the rural areas of developing countries will be launched today at the annual meeting of Member States of the International Fund for Agricultural Development (IFAD).

IFAD welcomes the European Union’s commitment to a new impact fund targeting small agribusinesses across emerging markets

December 2018 - STORY
The European Union has committed €45 million to the establishment of a new impact fund that will boost investments in small rural agribusinesses across emerging markets.