According to the World Economic Forum, Small and Medium-Sized businesses (MSMEs) are vital to Africa’s economy and are responsible for more than 80 percent of the continent’s employment and 50 percent of the Gross Domestic Product (GDP).
Agricultural small and medium enterprises (Agri-SMEs) play an even more important role, as they are crucial in the development of more inclusive and sustainable food systems as they are responsible for the entire value chain.
The sector is critical in providing job and income opportunities for young women and men. Although the number of Agri-SMEs in Africa have continued to grow over the years, the development, potential and sustainability of the business has been constrained by persistent financial, policy and innovation challenges that have hindered their full growth and potential.
Over the years, most of the efforts to improve the performance and competitiveness of the sector have focused on the challenges the SMEs face in accessing affordable and flexible financing to enable them to expand and scale-up.
However, the sector continues to face other significant non-financial challenges that have hindered the growth of Agri-SMEs such as poor innovation strategies, access to an enabling business environment, access to markets, access to human capital and access to skills and capacity development.
Due to inability to access new technology and lack of information on the new agricultural technology, majority of the SMEs are still using outdated methods to carry out their agricultural activities, which leads to poor productivity and lack of scalability.
Both the government and the private sector need to come together to address these challenges that have hindered the growth of the sector in a profound way, from an innovation perspective, taking into consideration the peculiar social, economic, cultural and environment in which the SMEs operate in.
The interventions must promote linkages between learning and research institutions, focusing on agriculture for technology development and transfer to SMEs, in order to create awareness on skills certification and development, and market opportunities.
Innovation in the sector will seek to enhance competitiveness, productivity and sustainability of SMEs in supporting the economy and ultimately generate jobs for young people.
Mastercard Foundation Fund for Resilience and Prosperity will contribute to solving some of the challenges faced by Agri-SMEs through several interventions like offering direct financial support through a Challenge Fund intervention, providing investor support to enable Agri-SMEs attract potential investors and providing capacity building through a technical assistance intervention.
The Fund is targeting SMEs that have innovative and scalable business models with significant potential to create jobs for young people, especially young women, young people living with disabilities and refugee youth.
Selected SMEs will receive grants ranging from $ 500,000 to $2.5 million, disbursed over a three-year period, and based on the applicants’ development stage, scalability and business model.
Additional support to successful applicants will include tailored technical assistance in alignment with the fund’s objectives over the 3-year period.
SMEs working in Kenya, Benin, Burundi, Botswana, Cameroon, Côte d’Ivoire, the DRC, Ethiopia, Ghana, Malawi, Mozambique, Nigeria, Rwanda, Senegal, Sierra Leone, South Africa, South Sudan, Tanzania, Uganda and Zambia are encouraged to apply to the Fund and can visit www.frp.org for more information.
The writer is the Mastercard Foundation Fund for Resilience and Prosperity Communications and Convening Lead at KPMG East Africa
