UNCDF in Madagascar
East and Southern Africa and the Arab States Region
Loans
Guarantees
Our work
In Madagascar, UNCDF serves as a strategic investment enabler, transforming vulnerable territories into engines of growth. In partnership with local authorities, financial institutions, and development actors, UNCDF creates the conditions necessary to attract investment in key sectors such as:
- Sustainable energy, by expanding access to reliable and affordable energy services,
- Micro, small, and medium-sized enterprises (MSMEs), by deploying catalytic concessional finance to derisk lending and expand sustainable credit flows;
- Agricultural value chains, by boosting productivity, local processing, and market access.
UNCDF’s work is fully aligned with the country’s strategic priorities, particularly through the General State Plan (PGE) and the United Nations Sustainable Development Cooperation Framework (UNSDCF) Madagascar 2024–2028. These frameworks guide public policy toward inclusive and sustainable growth, in line with the Sustainable Development Goals (SDGs).
Through its investment-driven and financially innovative approach, UNCDF turns structural challenges into economic opportunities. It connects underserved territories to the capital flows needed for their sustainable transformation, while strengthening community resilience to climate and economic shocks.
Strengthening access to finance for MSMEs through local banks and incubators
The INCUBOOST project is part of the Youth Start Expansion Last Mile Finance initiative (2018–2027) and runs from 2023 to 2027. It aims to strengthen the SME incubation ecosystem in Madagascar.
The project is implemented in partnership with the European Union, People Power Inclusion (PPI), and the United Nations Industrial Development Organization (UNIDO). While our partners focus on improving the capacity of businesses Incubators and accelerators, as well as enhancing the coordination among them, UNCDF’s role is to enable coordination between domestic financial institutions (banks, fintechs, microfinance institutions) and the incubation ecosystem to support the extension of commercially viable lending to underserved MSMEs.
Empowering Madagascar’s MSMEs with the tools, financing, and partnerships they need to grow and thrive. Photo: UNDP Madagascar, Charbon Bio, Commune Rurale Mahitsy.
In this regard, UNCDF partners with OZE Inc, a pan-African fintech, to provide SMEs with an AI-powered accounting app that supports better record-keeping and generates credit scores. This enables banks to strengthen risk assessment and extend financing to enterprise segments that would otherwise be excluded from formal credit, targeting at least 500 users and 30 financed SMEs.
Additionally, UNCDF partners with BNI Madagascar (a local bank) and Première Agence de Microfinance (an Aga Khan microfinance) institution to develop adapted loans products that leverage the existing guarantee mechanisms available in Madagascar. The activity aims to provide loans amounting to USD 200,000 to 50 SMEs. It will also support portfolio-level risk sharing between lenders and enterprise support organizations to ensure a lasting impact on access to finance beyond UNCDF’s intervention.
Unlocking sustainable energy investment in Madagascar: a pathway to inclusive development
Since 2022, Madagascar has been strengthening its financial architecture to support sustainable energy investments across public and private sectors. Central to this effort is the Financement Intégré pour l'Énergie duRable (FIER) project, funded by the Joint SDG Fund and jointly implemented by UNCDF, UNDP, and UNIDO. FIER aims to build a resilient financial ecosystem capable of mobilizing stable and diversified funding for both large-scale infrastructure and decentralized energy solutions, particularly in rural and underserved areas.
A key component is a de-risking facility that offers tailored instruments, such as guarantees, concessional loans, and blended finance, to reduce investment risks and attract private capital. Under this mechanism, UNCDF extended a concessional loan to IZILY (formerly Baobab+), a distributor of affordable solar energy and digital solutions across Africa, enabling 5,226 households to access clean cooking equipment and solar home electrification kits, with women representing 51% of beneficiaries. Overall, FIER will provide sustainable energy to more than 80,000 people and reduce 120,000 tons of CO₂ emissions.
Powering clean energy access in Madagascar through innovative finance. Photo: FIER Project, IZILY (formerly Baobab+).
Latest news and stories
Our partners
UNCDF’s work in Madagascar is made possible thanks to collaboration with the Government of Madagascar, the European Union, the Joint SDG Fund, the United Nations Development Program (UNDP), the United Nations Industrial Development Organization (UNIDO).
Documents
This section brings together key documents related to UNCDF’s work in the country. It includes a curated selection of publications, papers, and reports that reflect the scope of engagement at country level, from programme design to implementation and outcomes.
These documents offer additional context on how initiatives are developed and delivered, and how partnerships contribute to advancing national priorities. They are intended to support transparency, facilitate knowledge sharing and serve as a practical resource for partners, stakeholders and others seeking a deeper understanding of UNCDF’s work.
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Contact us
For inquiries about UNCDF’s work in Madagascar, including partnerships, investment opportunities, or ongoing initiatives, please contact: esaa.region@uncdf.org.
