IFC, a member of the World Bank Group, and South Africa’s Absa Group Limited have announced a $50 million commodity trade finance facility for Valency International Pte Ltd.
This facility will support the pre-export financing of agricultural commodities in West and East Africa. Valency, a Singapore-based company, will use the funds to buy cashew nuts, sesame seeds, shea nuts, ginger, and soya beans.
The working capital will allow Valency to source these products from smallholder farmers and local traders in Cote d’Ivoire, Nigeria, Ghana, and Tanzania.
These farmers, who manage 80 percent of Africa’s farmland, will gain better access to markets through Valency’s procurement activities. IFC and Absa will each contribute $25 million to the facility.
Also Read: Winich Farms Raises $3 Million in Pre-Series A Funding to Expand and Improve Tech
Supporting Smallholder Farmers
This investment is part of IFC’s Global Warehouse Finance Program and its Africa Trade and Supply Chain Recovery Initiative. The initiative is designed to support Africa’s economic recovery and smallholder farmers who often lack access to financing.
“As one of the largest global investors in agribusiness in Africa, IFC sees a tremendous opportunity to support economic growth and job creation in this critical industry,” said Sérgio Pimenta, IFC’s Vice President for Africa.
“We are pleased to work with Absa and Valency to help ensure that farmers across the region are better integrated into the marketplace and have the opportunity to grow and thrive.”
Tshimbi Ntuli, Head of Structured Trade and Commodity Finance for Absa, highlighted the importance of partnerships.
“IFC and Valency share our strategic vision of supporting Africa’s growth and development. At Absa, we believe that partnerships like these are crucial in driving the continent’s economic transformation. We are excited to collaborate with the IFC and Valency to drive sustainable impact in the African agricultural sector.”
“Together, we are making a meaningful impact on the continent’s agricultural sector and the communities we serve.”
Valency’s Role in African Agriculture
Valency’s Group Chief Executive Officer, Sumit Jain, expressed enthusiasm about the partnership. “Valency is excited to work with partners like IFC and Absa as we continue to develop the West and East Africa agricultural sectors.
This facility will enable us to engage more directly with thousands of farmers. It will further integrate them into the value chain and bring their produce to more markets.”
This collaboration aims to support smallholder farmers, cooperatives, and local buying agents in Africa. Moreover, it will enhance their access to markets and capital.