Credit: ABC Fund
Bamboo Capital Partners, Palladium’s asset management arm, has announced a round of investments totalling USD 3 million and EUR 3 million into three microfinance institutions in Benin, Ghana, and Colombia through the Bamboo-managed Agri-Business Capital Fund (ABC Fund).
The ABC Fund is a blended-finance impact fund which provides catalytic financing to underserved yet profitable segments of agribusiness value chains in developing countries.
The announcement marks the twenty-third investment by the ABC fund across 10 different countries worldwide as it continues its mission to tackle poverty, improve the lives and livelihoods of smallholder farmers, and increase opportunities for women and young people.
Around the world, many small businesses and underserved communities are unable to access capital, lines of credit, or loans from traditional banks. And in many developing countries, smallholder farmers and rural small businesses are the backbone of the economy and the main producers of food. They have a high potential for growth and can drive social development for their communities and countries, but often require capital to do so. Microfinance institutions can provide that capital, making them critical for many small businesses and economies around the world.
In Colombia, the ABC Fund committed USD 3 million to Finamiga, one of the fastest growing microfinance institutions in Colombia. Operating across 146 municipalities, of which 38 are post-conflict zones, Finamiga has disbursed more than 30,000 loans. The ABC Fund’s loan will provide further liquidity and growth capital to Finamiga to enable it to disburse at least 4,000 additional agricultural loans and 1,000 vehicle loans for small farmers.
Finamiga’s loans allow farmers and rural clients to increase their incomes by giving them access to working capital to purchase supplies for their crops and invest further in their land.
“We are glad to continue and expand the ABC Fund’s mission to support smallholder farmers across South America, that may otherwise be excluded from the financial system,” says Jean-Philippe de Schrevel, Founder and Managing Partner of Bamboo Capital Partners. “We are delighted to partner with Finamiga with the goal to help raise communities out of poverty.”
An ocean away, the ABC Fund is also investing EUR 1 million into Ghana-based Success for People (SFP), a microfinance institution that offers credit and savings opportunities to small and micro enterprises, groups and individuals with a special focus on smallholder farmers and women groups who have been excluded from the formal banking system.
SFP is also committed to building the capacity of entrepreneurs through training. The majority of its clients are women and 73 percent of its borrowers are between the ages of 24 and 35. With the EUR 1 million facility, SFP plans to disburse more than 7,000 agriculture loans over a three-year period – at least 80 percent of which will be directed to female borrowers.
“The ABC Fund is pleased to continue its mission to support smallholder farmers across West Africa, and especially providing funds that will help support women and young people,” adds de Schrevel.
And in Benin, ABC Fund has invested EUR 2 million into PEBCo, one of the largest agribusiness financiers in the country, enabling it to continue to finance its 280,000 clients, the majority of which are female borrowers. PEBCo will direct most of the funding to soya, cotton, rice, maize, and pineapple production as well as storage and warehousing.
“Our recent investments in PEBCo and Success for People will help provide access to finance to financial institutions that on-lend to our target beneficiaries, the smallholder farmers,” de Schrevel concludes.
Smallholder farmers supply about one third of the world’s food supply, yet many live below the poverty line or in rural areas without access to technical assistance or capital. For developing countries to continue to rebound post-pandemic, supporting smallholder farmers – the backbone of many economies – through microfinance and critical funding as the ABC Fund does will be key to ensuring that countries can build back more sustainably.