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Nigerian agriculture gets $31 million boost, but don’t call it an impact fund

The Nigerian government launched its Fund for Agricultural Finance in Nigeria in 2014 to draw private investors into smallholder agriculture.

New backing from the African Development Bank, DFID Impact Fund, and Dutch Good Growth Fund brings the fund’s total pot to $66 million. The fund is managed by private equity firm Sahel Capital and backed by development banks and agencies.

FAFIN makes “quasi-equity” investments structured as debt, which have the potential for higher returns.

The fund has made four investments to date that support 1,000 small farmers and their families. It is not marketed as an “impact fund,” said Dalberg’s Joe Dougherty (p. 8), who helped structure the fund.

“By definition, FAFIN will have an impact, but the feeling was that advertising it as an impact fund would lead to misaligned expectations about returns and investment criteria.”

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