Small agricultural businesses and smallholder farmers in Malawi will receive new financing after EIB Global agreed a €7.5 million loan with Centenary Bank.
The money will be channelled to micro agri-food enterprises with fewer than 10 employees and to small-scale farmers, the European Investment Bank Group informed on Tuesday.
Half of the financing is earmarked to support sustainable, climate-resilient agriculture, and the other half is set aside for women- and youth-led businesses.
Agriculture accounts for more than 70% of employment in Malawi, while sustainable farming is underdeveloped partly because of limited access to finance.
The loan is backed by an EU-financed guarantee and is linked to the European Union’s Global Gateway initiative, a programme for investment partnerships outside the EU.
Technical support alongside the loan
A technical assistance programme will run alongside the financing to strengthen Centenary Bank’s capacity to expand agricultural lending and reach underserved clients, and to encourage the adoption of climate-resilient farming practices, EIB Global said.
“Seven in ten people earn their living from the land, yet the smallest farms and agri-businesses are often the last to receive financing,” EIB Vice-President Marko Primorac stated.
Centenary Bank Acting Managing Director Beatrix Mosiwa called the agreement “a great milestone for Centenary Bank,” saying it supported the lender’s mission of providing inclusive and sustainable financial solutions.
Agri-food products make up most of Malawi’s exports to the European Union, the European Investment Bank Group noted.
EIB Global has invested more than €630 million in 47 projects in Malawi since 1977, supporting sectors including energy, water and transport.
