THE European Investment Bank (EIB) and European Union have confirmed new cooperation with First Capital Bank to transform access to finance for agricultural businesses across Malawi.
The impact of the new EUR 12.5 million EIB financing to First Capital Bank, will be enhanced by both specialist best practice agricultural investment technical assistance and European Union contribution of EUR 5 million to support further long-term agricultural financing. This will enable an increased contribution by smallholder farmers to national agricultural production and exports.
The new financing initiative has been launched to address specific challenges holding back agricultural investment and is part of the broader ‘Kulima – promoting farming in Malawi’ programme developed by the European Union and Government of Malawi.
First Capital Bank joins ECOBANK Malawi, and together the two leading local institutions will provide a total of €50 million of new financing for agricultural investment. Agriculture value chain companies across Malawi will be able to access loans with maturities of up to 7 years, longer than commonly available in the market to expand, upgrade and modernise their equipment, and unlock new business opportunities.
‘Increasing high impact agricultural investment is crucial for Malawi. This new partnership between First Capital Bank, the European Investment Bank and the European Union will benefit thousands of small holder farmers across our country and unlock economic opportunities from sustainable agriculture in the years ahead.’ said Agness Jazza First Capital Bank, Deputy Chief Executive Officer.
‘The European Investment Bank recognises the importance of agriculture for both economic activity and social development. This latest partnership with First Capital Bank will unlock investment by smallholders across Malawi facing challenges of climate change and the Covid-19 pandemic. The EIB is pleased to support this visionary Team Europe Kulima initiative that tackles barriers to agricultural investment.’ said Thomas Östros, European Investment Bank Vice President.
‘Team Europe is working with Malawian partners to transform opportunities in rural communities. Today First Capital Bank, the EU and the EIB, are joining forces to boost agricultural investment in a pioneering initiative that is a model for Africa.’ said Aurélie Valtat, Chargé d’affaires of the Delegation of the European Union to Malawi.
The new agriculture access to finance cooperation was confirmed in Brussels by EIB President Werner Hoyer ahead of the EU-Africa Summit last week.