Launch of the new European solidarity financing fund for Africa, FEFISOL II
Following the success of the first FEFISOL fund, which closed in July 2021, its promoters, the social investors SIDI (Solidarite Internationale pour le Development et I'Investissiement) and Alterfin, have structured this new fund dedicated to financing African rural microfinance institutions and agricultural entities sourcing from small-holder farmers in Africa.
The European Investment Bank, Proparco via FISEA+ (the AFD Group's facility implemented by Proparco as part of the Choose Africa Initiative), the Belgian Investment company BIO, as well as Global Alliance for Banking on Values members Alternative Swiss Bank, Credit Cooperatif, Banca Etica and SOS Faim Luxembourg, have recently signed up for a stake in the fund.
The FEFISOL II Fund is designed to respond to the crucial issues of financing vulnerable populations in rural areas in Africa, and more particularly the financing of the agricultural sector. Today, the penetration rate of microfinance in rural areas in Africa remains very low: less than 5% of the loans disbursed by traditional; financial institutions are intended for the agricultural sector and less than 10% of farmers have access to formal sources of credit. Nevertheless, the agricultural sector accounts for 23% of the continent's GDP and 55% of employment. Despite increasing urbanization, almost 60% of the population of sub-Saharan Africa, lives in rural areas.
The fund will be implemented in more than 28 African countries, and should eventually support 110 microfinance institutions or agricultural companies and cooperatives sourcing from smallholders, most of which are Fair Trade or organic certified.
FEFISOL II is making its first closing at 22.5 million euros, and a technical assistance package of 1 million euros from Proparco via FISEA+ with the final objective of raising 6 million euros. The 2nd closing will be launched in 2023, with the first disbursements to be made in July 2022.
By supporting the implementation of socially and environmentally sustainable practices, FEFISOL II directly aims to improve the living standards of vulnerable populations in rural Africa, reduce inequalities and promote sustainable agricultural development.