AgriFinancing

Q: How much first loss is needed by a fund targeting agri-SMEs in Africa? A:  Nobody really knows. What happens in practice?  Fund managers raise as much first loss as they can.  In a NextBillion article from 2021, Brian Milder from Aceli Africa notes that this is “a reasonable approach in the absence of more objective standards defining appropriate levels of subsidy based on the sector, geography and impact they are targeting”. This approach benefits fund managers “which are best at fundraising, as opposed to which can deliver impact most efficiently in a competitive marketplace” and in the end, there is “minimal accountability when it comes to capital additionality or impact in the actual design or implementation of most blended finance vehicles”. How does Aceli address these challenges (and what can we learn)? Aceli collected the data they needed on loan economics, explicitly linked impact to transactions, and took a marketplace approach. 1) Aceli and Dalberg collected data on and analyzed “over 9,000 agri-SME loans (totaling $3.7bn) from 31 commercial and impact lenders”. 2) Aceli has strict impact criteria that are applied on a loan by loan basis which provides accountability.  3) Aceli takes a market based approach based on the assumption that it “is necessary to support the full range of lenders that currently serve different parts of the agri-SME economy”. FASA does #3 but needs to work on #1 and #2.  To start, we need to understand the economics of a commercial fund, a sub-commercial fund without first loss, and the impact of first loss. I recently learned a new term, Fermi calculations (h/t Peter Baker), which are approximate calculations using rough numbers. In that spirit I have tried to come up with simple examples as a thought exercise until we are able to collect the actual data. Rather than trying to be really detailed or super accurate, I’ve intentionally kept it general to highlight some broad goals: ◾ Identify data points needed to understand fund economics ◾ Compare blended finance vehicles to commercial vehicles ◾ Understand limitation of first loss to offset high OPEX costs Happy to update my assumptions based on any feedback and/or share my spreadsheet to play around with yourself. I think the next step will be to create examples for different types of funds. #FASA #FASAFund #agrifinance #agfinance #agriSME #agriSMEs  #blendedfinance #agriculture #impinv #CSAF #GDPRD #ASLC #SubsidyForData #EvidenceUseItOrProduceIt Yasser Toor | Joshua Bicknell | Mauricio Benitez

Last month, I had the opportunity to interact and capacity build apprentices seconded to Equity Bank Rwanda under an interesting apprenticeship programme being executed by RTI International, in the USAID's Feed the Future Rwanda, Hanga Akazi initiative. Under the partnership, over 60% of the apprentices joining the bank will be retained and absorbed by the bank after the 6 months apprenticeship period. This comes as a great idea and step towards job creation, building and integrating resilient agri-oriented workforce into the bank in line with the bank's ambitious plan under it's Africa Recovery and Resilience Plan to grow it's lending to Food & Agriculture mix to 30% of it's entire lending portfolio. Mark you, all the apprentices joining the bank have an agricultural background or some practical experience and the training was made possible by Aceli Africa's T/A to the bank. The general belief has been that, it's easier to transform a farmer into a banker than a banker into a farmer 😀. Success of initiatives supporting Food and Agriculture systems is only possible when different parties and stakeholders work together towards some commonalities. Andrew Ahiaku Geoffrey Nyamao Darius Clement NKURIZA Manasseh Manirakinga( PMP, RMP, AgriFin) Janet Kanyambo Aceli Africa Maarten Susan John Ssali AgriFinancing Moving Frontiers (K) Ltd. #Youthempowerment #FoodandAgriculture #Accesstofinance #Sustainableagriculture #Morethanfinance

Last Thursday, we had the privilege of co-hosting the 𝐔𝐧𝐥𝐨𝐜𝐤𝐢𝐧𝐠 𝐈𝐦𝐩𝐚𝐜𝐭 𝐅𝐢𝐧𝐚𝐧𝐜𝐞 𝐟𝐨𝐫 𝐍𝐮𝐭𝐫𝐢𝐭𝐢𝐨𝐧 event in collaboration with the ATNi (Access to Nutrition initiative). This event brought together key stakeholders across the food and nutrition value chain such as investors, technical assistance providers, and innovative companies—to explore how we can integrate nutrition into the broader impact investing agenda.   A central theme of our discussions was how nutrition-focused investments can move beyond addressing food insecurity to tackle the negative externalities of poor nutrition. As Greg S Garrett, Executive Director of ATNi (Access to Nutrition initiative), rightly emphasized, “𝐒𝐢𝐦𝐩𝐥𝐲 𝐢𝐧𝐯𝐞𝐬𝐭𝐢𝐧𝐠 𝐢𝐧 𝐟𝐨𝐨𝐝 𝐢𝐬 𝐧𝐨𝐭 𝐞𝐧𝐨𝐮𝐠𝐡.” Investments must actively promote access to affordable, nutritious products while mitigating the risks of poor dietary outcomes.    The event also highlighted the lived experiences of SMEs, who are vital players in this space yet face significant barriers in scaling their solutions. During a dynamic panel discussion, founders from Kwanza Tukule Foods Limited, Cherubet Foods, and TenX Nutrition shared the persistent challenges they encounter—𝘭𝘪𝘮𝘪𝘵𝘦𝘥 𝘢𝘤𝘤𝘦𝘴𝘴 𝘵𝘰 𝘳𝘦𝘴𝘰𝘶𝘳𝘤𝘦𝘴, 𝘭𝘰𝘸 𝘮𝘢𝘳𝘬𝘦𝘵 𝘢𝘸𝘢𝘳𝘦𝘯𝘦𝘴𝘴, 𝘩𝘪𝘨𝘩 𝘭𝘰𝘨𝘪𝘴𝘵𝘪𝘤𝘢𝘭 𝘤𝘰𝘴𝘵𝘴, 𝘢𝘯𝘥 𝘵𝘩𝘦 𝘤𝘰𝘮𝘱𝘭𝘦𝘹𝘪𝘵𝘪𝘦𝘴 𝘰𝘧 𝘢𝘥𝘢𝘱𝘵𝘪𝘯𝘨 𝘵𝘩𝘦𝘪𝘳 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴 𝘮𝘰𝘥𝘦𝘭𝘴 𝘧𝘰𝘳 𝘶𝘯𝘥𝘦𝘳𝘴𝘦𝘳𝘷𝘦𝘥 𝘮𝘢𝘳𝘬𝘦𝘵𝘴. Their insights underscored the need for innovative financing mechanisms and partnerships that support both growth and impact.   A heartfelt thank you to ATNi (Access to Nutrition initiative) and all participants for the insightful discussions and showing us how impact investing poses opportunities for closing these gaps. Anastacia Ngunjiri Luiana Temba Marina Plyta Maarten Susan Christopher Board Hammed Olaoluwa Jimoh, PMP®, RAS Fabio Rappenecker  Khadija Mohamed-Churchill Mary Cherop #ImpactLinkedFinance #ImpactInvesting #Nutrition 

🌿 Join Us at FINAS 2025! 🌿 We're excited to announce the Financing Agriculture Sustainably Conference (FINAS 2025) to be held on 20-22 May 2025 at KICC, Nairobi. Connect with industry leaders, explore innovative solutions, and drive sustainable agriculture forward. Don't miss out! Engage us for partnership opportunities. 🌱 finas.rootooba.com #FINAS2025 GIZ Kenya Hamadi Boga Jared Ochieng' #FINAS2025 Dr. Sophia Baumert Apollo Agriculture Sheila Komen Keino Sustain Africa AGRA AgriFinancing Maarten Susan Wohoro Ndohho Tabitha Njuguna (PhD) Samuel M. Sharon Mosin Hedwig Siewertsen Penny Musengi Moses Abukari Leonard Kubok KPMG Kennedy Mugambi Kelvin Mashisia Shikuku PwC Dr. Hassan Bashir Simon Kinuthia Duncan Oyaro Nyanamba Nungari Mwangi, PhD , Daniel Munyambu John Olwande Benjamin Njenga Carol Matiko Amrik Heyer FSD Kenya Pesira Limited Dr. Charity Mutegi

Today marks the end of another round of training for senior Credit Teams, Regional Managers, Branch Managers, ASME RMs in Western Uganda. From the teams, this was one of their best training which incorporated pre/post training quizzes, pre-class E-learning for new team members, classroom sessions, role plays, group discussions, case studies/ practical loan processing, and field visits to ASMEs. This provides the teams with a comprehensive understanding of the operations and financial needs of various actors in the food systems and more importantly, how to present the client's information for loan decisions/ credit write-ups, and loan structuring in Ag-lending. The end game is an effective TAT in loan processing through efficiency of synced teams in the credit ecosystem. One of the take aways from the recent trainings is that E-learning has a role to play in preparing teams for more advanced and practical class/group training and banks like Opportunity Bank are more willing than ever to grow their exposure in Agri. Thanks to partners like Aceli Africa, the increased buy-in by FIs' boards/ senior management and the dedication of of the foot soldiers in the branches. #Aceliafrica #Movingfrontiers #Agrifinancing #Agrismefinance #Sustainablefinance #Efficientcreditprocesses.Maarten Susan John Ssali AgriFinancing Aceli Africa Andrew Ahiaku

It has been three great days of interaction, training and cross learning with the Opportunity Bank's Agri-SME lending team in Mbale, Eastern Uganda, which included a field visit to a multi-enterprised farmer. This is one of the many banks committed towards supporting the food systems with the support of Aceli Africa's innovative risk sharing and incentive program. #Aceliafrica #Movingfrontiers #Agrifinancing #Sustainableagriculturalfinance .Maarten Susan Aceli Africa Andrew Ahiaku John Ssali AgriFinancing

As SMEs seek to scale to KES 1 billion in revenue, Juanco Group stands out. While Kenya imports hundreds of thousands of tonnes of fertilizer quarterly, Juanco produces the same product locally in Ngong. Founded by Hannah Wainaina, this woman-owned enterprise employs 67 staff, generates over KES 300 million in annual revenue, and has regional sales offices. With support from KIEP250+ (Certification, CAPEX), the SME is poised to drive import substitution and strengthen local manufacturing. Kenya can 🤛, and most certainly, women can 🤛. #KIEP250plusSMEs #KIEP250PlusWomen #KenyanSMEs #KenyanBusiness