The Council on Smallholder Agricultural Finance (CSAF) has officially transitioned to the Global Development Incubator (GDI). Founded in 2012, CSAF is an alliance of 12 leading impact lenders that promotes industry standards and best practices for lending to small- and medium-sized enterprises (SMEs) in the agriculture sector globally. CSAF members include AgDevCo, Alterfin, Global Partnerships, Impact Finance, Incofin Investment Management, Oikocredit, Rabo Rural Fund, responsAbility Investments AG, Root Capital, Shared Interest Society, SME Impact Fund, and Triodos Investment Management.
CSAF members collectively lend $700M annually to enterprises across Africa, Asia, and Latin America that provide market linkages and other services such as agronomic training, inputs, and credit to 2.2M smallholder farmers. In recent years, CSAF has played a leadership role in advancing sector knowledge – publishing annual “state of the sector” reports in collaboration with MIX, convening stakeholder workshops, and analyzing the economics of agricultural SME lending globally and in East Africa in partnership with Dalberg Advisors.
Since CSAF’s founding in 2012, it has operated with a part-time secretariat housed at Root Capital, one of the alliance’s seven founding members. As CSAF has expanded its membership and engaged other stakeholders to share data and learning, members decided that CSAF needed more dedicated resources and an institutional home. CSAF selected GDI as the host given its alignment with CSAF’s mission and values, its history collaborating with CSAF, and synergies with its other agricultural finance programs.
In recent months, CSAF has partnered with GDI to develop a new initiative called Aceli Africa that seeks to increase lending by both CSAF members and local financial institutions to agricultural SMEs in East Africa. CSAF and Aceli Africa join ISF Advisors and the Rural and Agricultural Finance Learning Lab, also housed within GDI, as industry leaders generating sector learning and innovation in agricultural finance.
Brian Milder, who previously directed CSAF among his responsibilities as a senior executive at Root Capital will lead CSAF as well as the design and implementation of Aceli Africa. He is joined by Liz Muange – a development finance practitioner with experience in impact investing, entrepreneurship development, and agricultural finance based in Nairobi, Kenya.
Both CSAF and Aceli Africa are based on the premise that agricultural SMEs have the potential to make significant contributions to the Sustainable Development Goals, particularly Goals 1 (no poverty), 2 (zero hunger), 5 (gender equality), 8 (decent work), 13 (climate action), and 15 (life on land). However, agricultural SMEs have yet to realize this potential because they fall into the “missing middle” – i.e., they are typically too large for microfinance but unable to access loans from commercial banks. This gap is estimated at $65B across Sub-Saharan Africa.
Drawing upon the experiences of CSAF members globally, Aceli Africa aims to close this gap by catalyzing a more competitive financial market to serve high-impact agricultural enterprises and promoting a strong enabling environment for this market to flourish and for agricultural SMEs to achieve their growth and impact potential.
The transition of CSAF to GDI and the formation of Aceli Africa signals momentum and maturity in the field of agricultural SME lending. The GDI team is honored to support both initiatives and further contribute to improving livelihoods for the 450 million smallholder farm households globally.