KIGALI, Rwanda — Equity Group has committed US$90 million from its own balance sheet towards financing climate-resilient agriculture and rural businesses in East Africa.
The commitment is part of the newly launched Africa Rural Climate Adaptation Finance Mechanism (ARCAFIM), a US$200 million initiative developed together with the International Fund for Agricultural Development (IFAD).
Unlike programmes that rely entirely on public or concessional funding, ARCAFIM is structured to have a commercial bank share the financial risk alongside development partners.
The overall mechanism contains US$180 million in lending capital and approximately US$20 million in technical assistance.
Equity Group’s contribution represents half of the lending capital, matching concessional capital on a one-for-one basis.
The financing will be directed towards smallholder farmers and rural micro, small and medium-sized enterprises in Uganda, Kenya, Tanzania and Rwanda.
Equity Group Chief Executive Officer Dr. James Mwangi said the initiative was designed to change the way financial institutions approach rural borrowers.
He described smallholder farmers as entrepreneurs who require financial systems capable of supporting their businesses rather than treating them solely as beneficiaries of aid.
The financing will support investments in areas including irrigation, water harvesting, renewable energy, livestock, post-harvest storage and agro-processing.
The programme’s lending capital is expected to revolve through approximately four investment cycles, potentially generating about US$266 million in loans over the life of the mechanism.
The initiative is intended to establish climate-resilience lending as a normal commercial banking activity that can continue even after concessional funding is exhausted.
