Impact Loans in African Agriculture
AgroFides provides lenders with the opportunity to make a measurable social and environmental impact by lending to farmers via loans for their agricultural businesses.
Impact, but not charity
Impact loans in the agricultural sector of developing countries and emerging markets have a catalytic effect on job creation and social development. This is because the overwhelming majority of the workforce is in agriculture. Lending to farmers and cooperatives on the AgroFides platform produces returns in measurable impacts in social development and the environment combined with financial gains. These financial returns range from capital preservation to market returns on loans.
AgroFides' objective is to challenge the conventional approach to capital transfer from developed countries to developing countries and emerging markets. The current approach focuses on philanthropy on the one side and the need for market or above market return on investments on the other side. Our goal is to provide you with financial gains ranging from capital preservation, below-market returns, and market returns depending on your lending strategy coupled with your desired social and environmental impact goals.
Assessment, Education and Guidance
AgroFides takes a holistic approach to assist small and medium-scale farmers. Through a proper assessment of a farmer, we're able to not only gauge their ability to repay loans, but also their potential for growth in their farming and business practices. Combined with our assessment is a focus on education to ensure that farmers can maximize the potential benefits from the capital opportunities offered. Extension agents are able to provide in-person training and resources to farmers.
Opportunities in Africa
AgroFides recognizes the immense opportunity currently presented to creditors looking to do business in sub-Saharan Africa; in the last decade, more than half of the world’s most rapidly expanding economies have been in Africa. Moreover, the World Economic Forum predicts that by 2030, 43% of Africans will belong to the middle or upper classes, which will translate to a higher level of demand for goods and services (household consumption is expected to rise to $2.5 trillion), suggesting lucrative opportunities in African businesses. Ghana specifically has emerged as an economic powerhouse with Real GDP growth of 8.3% in 2018 in conjunction with rising incomes, lower poverty, and better health and education outcomes.
Why Lend to Farmers in Africa
Improving economic conditions in Africa is magnified when you consider the continent’s agricultural sector. According to the World Economic Forum, Africa’s agricultural industry will reside as the most valuable segment of the continent’s macroeconomy due to a projected household consumption aggregate of $740 billion spent on food and beverages in 2030. Nevertheless, 60% of the world’s unused arable land is in Africa, meaning there is tremendous room for additional growth to total agricultural output. Doing business in Africa’s agricultural sector is where an impact lending ethos and competitive returns are one and the same.
High Repayment Rates
Conventionally, banks and microfinance institutions overestimate the risk associated with smallholder and medium scale farmer lending. By rethinking the conventional approach to lending to farmers, with a particular focus on farmers' productivity and appropriate loan terms, the risks associated with lending to farmers will decrease.
- Hong, David, and Stephanie Hanson. 2016. “Scaling up agricultural credit in Africa,” Frontier Issues Brief submitted to the Brookings Institution’s Ending Rural Hunger project
Qualified Individual Lenders
AgroFides provides qualified individuals with sufficient capital to engage in a more advanced type of financial instrument with opportunities to diversify their investment portfolio and make real advancements in social and environmental issues. We offer a platform that allows you to make impact lending to farmers in developing countries. These impacts include areas in social development, financial inclusion, and the environment through agriculture while producing interest.
AgroFides provides an opportunity for your institution to advance its core social and environmental goals, while maintaining and growing its overall endowment, through agro lending in developing countries and emerging markets.
As an alternative to investment through private equities, AgroFides provides your family office with an opportunity to make more direct loans to individuals and their businesses in developing countries and emerging markets. We offer your clients meaningful connections to their impact lending goals.
IMPORTANT DISCLOSURES: AGROFIDES IS NOT A REGISTERED BROKER-DEALER, FUNDING PORTAL, OR INVESTMENT ADVISER. THE INFORMATION ON THIS WEBSITE DOES NOT CONSTITUTE INVESTMENT ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. THE INFORMATION ON THIS SITE IS FOR DISCUSSION PURPOSES ONLY AND IS NOT AN OFFER OR SOLICITATION TO PURCHASE OR SELL ANY SECURITIES OR FINANCIAL PRODUCTS. NONE OF THE INFORMATION ON THIS SITE TAKES INTO ACCOUNT ANY PERSON’S PERSONAL OBJECTIVES, FINANCIAL SITUATION, OR NEEDS AND YOU MUST DETERMINE WHETHER THE INFORMATION IS APPROPRIATE IN TERMS OF YOUR PARTICULAR CIRCUMSTANCES. WE RECOMMEND YOU OBTAIN FINANCIAL, LEGAL AND TAXATION ADVICE BEFORE MAKING ANY FINANCIAL INVESTMENT OR LENDING DECISION.