Today, the U.S. Agency for International Development (USAID), the Swiss Agency for Development and Cooperation, and the IKEA Foundation announced a joint $30 million commitment to Aceli Africa, an innovative program that incentivizes banks to lend to agribusinesses. With this commitment, Aceli Africa will unlock an additional $700 million by 2025 for 750 agribusinesses in the United Republic of Tanzania and the Republics of Kenya, Rwanda, and Uganda.

Through Aceli Africa, banks will make loans to small and medium-sized agribusinesses that reach underserved populations, with the goal of reaching one million smallholder farmers. The program will also inject new data, boosting government and investor confidence in African agriculture, in order to jumpstart lending to this undercapitalized sector for decades to follow. Investments like the one announced today advance the mission of the U.S. Government’s Feed the Future initiative to end global poverty and hunger by creating employment for millions of people across Africa, and support Prosper Africa’s goal of promoting a significant increase in two-way trade between the United States and the African continent.

Small and medium-sized businesses account for 60 percent of agricultural production and trade in emerging economies in sub-Saharan Africa. However, they face an investment shortfall of up to $65 billion every year because financial institutions are hesitant to loan money to the sector. This hinders the growth of African economies and limits people from breaking out of the vicious cycle of poverty and hunger. Closing this gap in financing is key to inclusive growth in Africa and around the world.

Through this joint investment in Aceli Africa and other programs under Feed the Future and Prosper Africa, USAID works with the private sector to scale up and sustain long-term financing for commercial enterprises and help countries move beyond the need for foreign assistance.