Afrique

Malawi


SDG Finance - Catalytic Investment

Build Malawi Window: A Specialized Structured Blended Finance Vehicle for Agribusiness

Challenge

Malawi records one of the lowest rates of investment in Africa with an average of only 15 percent of GDP invested from 2000 to 2018, compared to 24.5 percent in Tanzania and 34.7 percent in Zambia. Such an environment obstructs small and medium enterprises' (SMEs) access to finance. This means that many businesses run by women and other vulnerable groups are unable to grow, and Malawi's economy is unable to become inclusive. Malawi’s low rates of impact investing are primarily due to the relative infancy of the market, particularly for non-Development Finance Institution investors, coupled with falling levels of Foreign Direct Investment.

Innovation

The programme will reduce poverty, hunger, and inequality by creating jobs and supporting small businesses in the country’s severely undercapitalized agricultural sector. A structured blended finance vehicle, the first of its kind in Malawi, will aim to mobilize US$35 million. The Fund will invest patient capital. A technical assistance facility will help source an investable pipeline, assist businesses to improve quality of their growth and SDG impact, and reduce associated risks and costs.

SDG Impact

The Joint Programme will work to end poverty and hunger by increasing investment in agriculture and other manufacturing and service supply-chains, as well as increasing productivity within these supply-chains through technology and innovation; and achieving gender equality by supporting business where women are significantly represented in boards, management, staff, suppliers, or buyers. Targets for the programme include: 3,000 jobs (30% minimum for women and youth) created; 75,000 small-scale producers integrated into investees supply chains; participating small-scale producers’ income increased by 30%; expanded fiscal space with aggregated income taxes of  $19.3 million; and 15 supply chains streghtened.

Quick facts

Allocated by Joint SDG Fund:
US $8,100,000
Co-funding:
US $250,000
Total Funding:
US $8,350,000
Financial Leverage:
US $28,000,000
UN Agencies:
  • UNDP
  • UNCDF
  • FAO
National Partners:
  • Ministry of Trade – Principal Secretary
  • Old Mutual – Head of alternative Investment
  • NICO Asset Managers – Head of Investments
  • FCDO – Private Sector Development Advisor