IFAD, Equity Group launch $200M fund to finance 260,000 East African farmers
What's the deal? The International Fund for Agricultural Development (IFAD)Dealroom has a profile for this one. Try Dealroom → and Equity GroupDealroom has a profile for this one. Try Dealroom → have launched a $200 million financing mechanism for smallholder farmers and rural businesses across East Africa. The Africa Rural Climate Adaptation Finance Mechanism (ARCAFIM) aims to reach about 260,000 smallholder producers and 500 rural enterprises in Rwanda, Kenya, Uganda, and Tanzania over the next 12 years.
How it works: ARCAFIM combines $180 million in lending capital with about $20 million for technical assistance. The lending capital is expected to revolve through roughly four investment cycles, potentially generating about $266 million in loans to micro, small, and medium-sized enterprises and smallholder farmers.
Who's backing it? The mechanism draws support from the Green Climate FundDealroom has a profile for this one. Try Dealroom →, Finland's Ministry for Foreign AffairsDealroom has a profile for this one. Try Dealroom →, the Nordic Development FundDealroom has a profile for this one. Try Dealroom →, Denmark, and the European UnionDealroom has a profile for this one. Try Dealroom →. Equity GroupDealroom has a profile for this one. Try Dealroom → will match the concessional capital with $90 million from its own balance sheet.
Why now? The launch comes as smallholder farmers face rising pressure from droughts, floods, and other climate shocks, while access to affordable adaptation finance remains limited. Risk is shared across partners, with international backers covering a first-loss layer, a mezzanine layer split with Equity, and the bank taking senior risk.
What's the endgame? Funds will finance irrigation, water harvesting, resilient dairy and livestock systems, post-harvest storage, renewable energy, and climate-resilient agro-processing. Microfinance institutions and savings and credit cooperatives will receive technical assistance to build capacity for adaptation lending.
What they're saying: "ARCAFIM's ambition is to make rural climate adaptation a recognizable, viable and sustainable business line for African financial institutions," said Gérardine Mukeshimana, IFAD vice president. She added that climate finance only has an impact when it reaches rural communities and turns into actual investments.
The signal: Launched in Kigali on September 4 during the Africa Food Systems Forum 2026, the mechanism begins in East Africa but is designed to be replicated across the continent — a blended-finance model built to draw private capital into a segment banks have long viewed as too risky.
Read more: newtimes.co.rw
Image credit: CIAT International Center for Tropical Agriculture
