A New Specialized Business Financing Vehicle For SMEs in MW
A new Joint Programme funded by the United Nations Joint SDG Fund, which last week announced a US$41 million allocation for accelerating the Sustainable Development Goals (SDGs) in four countries, will create a new business financing vehicle in Malawi.
The specialized structured blended finance vehicle, the first of its kind in Malawi, will catalyze strategic financing by providing patient and flexible capital solutions to transformative and inclusive business models that drive the achievement of the SDGs in the country.
“This is an exciting and ground-breaking initiative that will directly impact mobilization of additional resources for Malawi to support poverty reduction by increasing investments in agriculture, manufacturing and service supply chains,” said UN Resident Coordinator Maria Jose Torres.
“The whole idea of the programme is to de-risk investments, facilitate access to finance for businesses as well as increase productivity by focusing on guaranteeing capital access for the most impactful invest ents in the production chain.”
In reducing poverty and hunger, the Joint Programme will support businesses at different levels of growth in the country’s severely undercapitalized productive sectors, working with the private sector to increase productivity using technology and innovation.
The programme will also promote gender equality by supporting businesses in which women are significantly represented in boards, management, staff, suppliers, or buyers. One of the targets for the programme in Malawi is to integrate 75,000 small-scale producers as investees in the supply chains to increase their incomes and, in turn, expand the country’s revenue base.
With total funding of US$8 million (about MK6.2 billion) from the Joint SDG Fund, the programme is anticipated to leverage an estimated US$28 million in co-financing and US$20 million in private investment. “We will also provide technical assistance to accelerate growth and reduce associated risks and costs to businesses. With this programme, we are opening opportunities for job creation or youth and women, and boosting Malawi’s growth,” Torres.
Malawi is among four countries that were selected from 155 proposals from over 100 country applicants across the globe in the $41 million portfolios of the UN’s Joint SDG Fund. The other countries are Fiji, Indonesia and Uruguay. UN Country Teams, in partnership with Governments, engaged senior finance experts to create in-depth approaches and solutions to SDG acceleration. With sincere appreciation for the contributions from the European Union and Governments of Denmark, Germany, Ireland, Luxembourg, Monaco, Kingdom of Netherlands, Norway, Portugal, Spain, Sweden, Swiss Agency for Development and Cooperation and our private sector funding partners, this milestone marks a transformative movement to achieving the SDGs by 2030.
Three UN agencies, namely UNDP, FAO and UNCDF, will jointly work with the Government of Malawi to implement the Joint Programme.
Currently, there are more than 20 Agencies and specialized organizations of the United Nations active in Malawi which, through their work, contribute to ensuring a better life for the people of Malawi.
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