Grains being sieved./PHOTO ; Bayer Foundation
A new global initiative has been launched to strengthen food security and sustainable agriculture in developing countries.
The Food Systems Innovation Finance Facility, created through a partnership between the Bayer Foundation and the United Nations Capital Development Fund (UNCDF), will provide catalytic financing to small and medium-sized enterprises (SMEs) working across food systems in Africa, the Asia Pacific, and Latin America.
Addressing a Global Food Security Challenge
Hunger remains one of the world’s most urgent challenges.
In 2022, more than 735 million people faced hunger, while climate change, conflict, and global economic shocks continue to strain fragile food systems. Local enterprises often hold innovative solutions, but many lack access to the capital they need to expand.
The new Facility seeks to close this gap by directing flexible and catalytic financing toward SMEs working in underserved markets.
The focus is on businesses that benefit smallholder farmers, women, and low-income consumers, while contributing to Sustainable Development Goal 2 -Zero Hunger.
“The Food Systems Innovation Finance Facility represents a transformative approach to tackling hunger and malnutrition by serving as an example of how corporate philanthropy can create value in collaboration with an innovative and committed finance partner like the UNCDF,” said Chitkala Kalidas, Executive Director of Bayer Foundation.
“By leveraging our resources and expertise, we aim to catalyse the flow of capital to innovative solutions that create lasting impact in the lives of millions. Philanthropic capital will be recycled and can benefit multiple social enterprises in the fight against hunger and malnutrition,” she added.
From Grants to Reinvestment
Between 2025 and 2027, Bayer Foundation will commit $4.5 million to the Facility. Unlike one-off grants, these funds will be invested through loans and guarantees that can be reinvested, multiplying their impact.
The approach is designed to crowd in additional partners, with Bayer Foundation’s contribution expected to catalyse more than three times that amount from other philanthropies and private donors.
“This partnership is a perfect example of UNCDF fulfilling its unique role within the UN Development System,” said Pradeep Kurukulasuriya, Executive Secretary of UNCDF.
“By channeling the Bayer Foundation’s philanthropic capital through our innovative financial instruments, we are derisking local businesses and paving the way for other investors to follow.”
Spotlight on Early Investments
The Facility’s first investment is in Nilus Peru, a social enterprise using technology to make nutritious food affordable in urban food deserts.
By connecting local producers with low-income communities, Nilus demonstrates the type of grassroots innovation the Facility intends to support across regions.
Further investments are expected in 2025, targeting enterprises that combine commercial viability with measurable social impact, especially in areas where food insecurity is most severe.
Building a Collaborative Ecosystem
Beyond financing, the Facility is designed to foster a broader community of funders and innovators committed to transforming food systems.
Other foundations and partners are invited to join, creating an ecosystem where risk-sharing and co-investment can accelerate progress.
“We are pleased to be working with several philanthropies to make their capital go farther, unlock and catalyse investments where capital traditionally doesn’t flow, and lift early-stage innovators and small businesses in food systems in underserved communities and high-risk markets,” Kurukulasuriya added.
Observers see the Facility as part of a wider shift in development finance. Blended models are increasingly used to extend the reach of limited philanthropic resources while drawing in private capital.
The measure of success will be whether such models can be scaled to mobilize the billions needed to address global hunger.
About Bayer Foundation
The Bayer Foundation is the philanthropic arm of Bayer AG. It supports initiatives in health, nutrition, and education, with a focus on advancing science for social impact.
The Foundation provides grants, fellowships, and catalytic funding to organizations and enterprises tackling global challenges such as food security and equitable healthcare.
About the United Nations Capital Development Fund (UNCDF)
The United Nations Capital Development Fund (UNCDF) is the UN’s capital investment agency for the world’s 46 least developed countries.
It uses public and private finance to support inclusive growth, focusing on access to finance, digital economies, local development, and food systems.
Through blended finance, loans, guarantees, and technical support, UNCDF helps small businesses and local governments expand services and create sustainable development opportunities.
