Smallholder farmers to get relief from Equity Group

What the report says

IFAD and Equity Group have launched a $200 million Africa Rural Climate Adaptation Finance Mechanism, or ARCAFIM, aimed at expanding climate adaptation finance for smallholder farmers and rural businesses in East Africa. The announcement was made last Friday at the Africa Food Systems Forum in Kigali, Rwanda, according to The Observer.

The programme is structured over 12 years and combines about $180 million in lending capital with roughly $20 million for technical assistance. It is being supported by co-financiers including the Green Climate Fund, Finland’s foreign ministry and the Nordic Development Fund, and is also co-financed by the governments of Denmark and the European Union. The mechanism will operate in Kenya, Uganda, Tanzania and Rwanda.

The partners say ARCAFIM is designed to reach around 260,000 smallholder producers and 500 rural micro, small and medium-sized enterprises, with at least half of beneficiaries expected to be women and 30% youth. The initiative is also intended to strengthen food security for about 1.2 million people and benefit an estimated 1.5 million people overall.

Beyond immediate lending, the effort is meant to help financial institutions develop products and systems that make climate adaptation finance a more regular part of rural lending. More broadly, it reflects a wider push across Africa to use blended finance to support climate-resilient agriculture, while creating a model that could be adapted in other regions.