Mobilizing Private Capital for Agriculture and Youth-led Enterprise
Women of the Ragussi Cooperative are proud to harvest shea nuts, the green gold of Burkina Faso.
US African Development Foundation
About Us
USAID CATALYZE Finance for Resilience (F4R) mobilizes blended finance through the strategic use of USAID funds to increase private sector investment and crowd-in private capital to agriculture and youth-led enterprises in USAID partner countries. F4R is part of the overall USAID CATALYZE project launched in October 2019. Private capital leveraged with funding from USAID will address the substantial funding gaps for agriculture value chain actors and youth-led enterprises in Burkina Faso and Niger.
CATALYZE F4R provides financial incentives to a network of financial facilitators and institutions based on the pay-for-results (P4R) principle and a blended finance approach, i.e., public and private funds. The program provides incentive tools, such as results-based contracts and performance grants, to increase the mobilization of private funds as well as new investments in target sectors. The activity supports underserved target areas and communities to secure private finance to maintain their business. Additionally, F4R focuses on providing loans to youth and women-led businesses in the target areas. Overall, F4R aims to enhance resilience, reduce poverty, promote job creation in the intervention zones, and improve the livelihoods of vulnerable populations.
A key objective of USAID CATALYZE is to contribute to USAID’s understanding of internal constraints to implementing blended finance projects, including where and in which contexts blended finance activities are most effective at mobilizing private capital for development. CATALYZE is also a support mechanism for USAID partners to deploy mixed-finance solutions in multiple sectors of activity across several countries. This activity deploys funds to connect finance and investment structures to local micro, small, and medium-sized enterprises (MSME), and larger anchor firms in the agriculture sector and to youth-led enterprises.
The goal of CATALYZE F4R is to improve access to finance and investment for agricultural and youth-led enterprises through multiple objectives:
Increase and improve access to finance for businesses and producers in the target sectors.
Mobilize blended finance for agricultural value chain actors and youth-led enterprises.
Develop a network and enhance the capabilities of local financial facilitators.
Create incentives and market linkages for local financial institutions to increase access to finance.
What We Do
To date, CATALYZE F4R has built a network of financial facilitators and financial institutions through performance-based grants and contracts to mobilize capital to agriculture value chain actors and youth-led businesses. This network creates linkages between credit applicants (producers, producer cooperatives, MSMEs) and credit providers in target areas and value chains.
F4R’s approach of strengthening market linkages and reinforcing financial facilitators and financial institutions’ capabilities creates a more robust and dynamic financial services market to serve targeted businesses. CATALYZE F4R’s incentives and network-building interventions ensure that financial facilitators and institutions have the skills, relationships, and motivation to invest in the agricultural sector and youth-led business for the long term.
The activity’s pay-for-results incentives to banks, microfinance institutions, and other financial providers offset their risk of working with underserved sectors and communities in Burkina Faso and Niger, thus increasing access to credit. This activity is designed to propel long-term investments in the agricultural sector and youth-led business in both countries, helping improve livelihoods in the Sahel region.
Where We Work
USAID CATALYZE F4R activity will mobilize more than $10 million over three years (2021-2024) to support finance and investment for local businesses in regions susceptible to frequent attacks by violent extremist groups in Burkina Faso and Niger that financial institutions typically associate with real and perceived risk.
In Burkina Faso and Niger, CATALYZE F4R is identifying local agricultural actors, youth-led and women-led businesses in target regions (East, Centre Nord and Sahel in Burkina Faso and Maradi, Tillabery, and Zinder in Niger) and target value chains (cowpea, small ruminants, poultry) who need financing and credit to invest and develop their businesses.
Expected Results (2021-2024)
Capital Mobilization
- Finance facilitators equipped with skills and experience serving small enterprises and those led by women and young people to meet their financing needs
- Significant blended finance capital mobilized, connecting financial and investment institutions with local businesses who are associated with real and perceived risks related to serving MSMEs
Financial Capacity-building
- Enhanced capabilities of financial institutions and financial facilitators to make or facilitate targeted value chain investments
- Increased access to relevant and inclusive financial services for agriculture value chain actors and youth entrepreneurs
Collaboration and Exchange
- Strengthened connections that create a favorable market and network of financial institutions and financial facilitators with improved awareness of and motivation to serve target groups