Nairobi, Kenya (PRWEB) May 10, 2011
Acumen Fund, a nonprofit global venture firm addressing poverty in South Asia and East Africa, and Grameen Foundation, a global non-profit serving the world’s poor through microfinance and technology, today announced a $1.75 million quasi-equity co-investment in Juhudi Kilimo Company Limited (Juhudi Kilimo). Juhudi Kilimo is a microfinance company in Kenya that provides loan products to smallholder farmers for productive agricultural assets. The Acumen Fund and Grameen Foundation co-investment of $1.2 million and $550,000, respectively, will help Juhudi Kilimo grow its portfolio and serve more farmers, hire new staff, and improve its efficiency across its seven branches.
“After a decade of investing patient capital in companies providing innovative solutions to poverty, Acumen Fund has learned that people want choice, not charity, an opportunity to better their own lives and communities, which is exactly what Juhudi Kilimo provides through its products and services for smallholder farmers,” said Jacqueline Novogratz, CEO, Acumen Fund.
“Grameen Foundation remains committed to expanding access to financial services for the poorest people, and we are pleased to support Juhudi Kilimo’s pioneering work with smallholder farmers working in Kenya’s remote rural areas,” said Alex Counts, president and CEO of Grameen Foundation. “We also applaud it for adopting the Progress out of Poverty Index, a social performance tool that will provide its management and stakeholders with valuable information on the clients it is reaching and changes in their economic well-being over time. We are also pleased to partner with Acumen Fund, since joining forces with like-minded, entrepreneurial social change organizations is our preferred approach.”
Agriculture is the backbone of Kenya’s economy, with nearly 80% of the population (30 million people) deriving their livelihoods from farming. Meanwhile, average landholding in the country continues to shrink, with Kenya’s average farm size now less than 2.5 hectares. The key to economic growth for Kenya’s smallholder farmers is access to productive agricultural assets, but 36% of rural Kenyans have no access to any form of financial services. Without appropriate financing, these productive assets are often out-of-reach. Juhudi Kilimo’s financing products enable farmers to access high-quality agricultural assets, such as improved breeds of dairy cows that can produce at least four times more milk per day than local dairy cows in Kenya. This improved productivity has the potential to increase household productivity by $600 annually.
“Juhudi Kilimo provides financing to smallholder rural farmers organized in groups to purchase productive agricultural assets, such as dairy cows and other livestock, irrigation equipment, and greenhouses,” said Aleke Dondo, Founder and Board Member, Juhudi Kilimo. “By financing income-generating assets, paired with targeted business and agricultural training, we help to build and sustain rural enterprises that create jobs and deliver greater market access and new services to these communities.”
Juhudi Kilimo plans to increase its client base from 7,322 in March of 2010 to over 25,000 by the end of 2015, aiming to improve the lives of nearly 125,000 rural Kenyans. The company began in 2004 within the K-Rep Development Agency (KDA) to target the underserved rural farmer market untouched by other K-Rep Group companies. Success of the asset financing program led KDA to explore spinning off the line into a new company, which was formally founded on 1 April, 2009 as Juhudi Kilimo.
“Agriculture-specific financing is relatively new to rural Kenya, but an important area of investment in a country where the vast majority of the population rely on agriculture to sustain themselves,” said Biju Mohandas, East Africa Director, Acumen Fund. “Acumen Fund’s investment in Juhudi Kilimo will expand our current agricultural portfolio and provide additional insight into agricultural finance, which we can then share with the rest of the region and world.”
About Acumen Fund
Acumen Fund is a pioneering not-for-profit venture fund that is changing how the world addresses poverty. Acumen Fund invests patient capital in business models that deliver critical, affordable goods and services to the world’s poor, improving the lives of millions. Since its founding in 2001, Acumen Fund has invested more than $40 million in companies that provide access to water, health, energy, housing and agriculture inputs to low-income consumers in South Asia and East Africa. For more information on Acumen Fund’s activities and investments, visit http://www.acumenfund.org and http://www.acumenfundblog.org.
Acumen Fund in East Africa
Acumen Fund has been investing in East Africa since 2001, focusing on a wide range of sustainable, scalable businesses that use market-based approaches to deliver products and services to millions of rural and urban poor. Investments made by Acumen Fund East Africa in local enterprises include a manufacturer of insecticide-treated bednets that are providing protection against malaria to millions of Africans; public sanitation facilities in Kenya’s underserved urban centers; microfranchises for quality healthcare and drug distribution; and a microfinance institution that is creating affordable, legal housing for former slum-dwellers. Leveraging strong relationships with local academic institutions and businesses as well as the global Acumen Fund network, Acumen Fund East Africa is actively exploring further investments in healthcare services, as well as potential investments in housing and energy services.
About Grameen Foundation
Grameen Foundation, a global nonprofit organization, helps the world’s poorest people lift themselves out of poverty by providing access to financing and management strategies to the local organizations that serve them. It also develops mobile phone-based solutions that address “information poverty” among the poor by providing tools, information and services in the fields of health, agriculture, financial services and livelihood creation. Founded in 1997, Grameen Foundation has offices in Washington, DC; Seattle, WA; Colombia; Ghana; Hong Kong; the Philippines; and Uganda. Microfinance pioneer Dr. Muhammad Yunus, founder of Grameen Bank and winner of the 2006 Nobel Peace Prize, is a founding member of its Board of Directors, and now serves as director emeritus. For more information, please visit http://www.grameenfoundation.org.
Grameen Foundation in Africa
Since 2003, Grameen Foundation has provided more than $16 million in funding to microfinance institutions in Ethiopia, Kenya, Ghana and Nigeria through loan guarantees and direct investment. One key program, the Pioneer Fund, targets institutions working with the rural poor throughout Sub-Saharan Africa, Latin America and Asia. To date, one-third of the Pioneer Fund’s portfolio companies represent early-stage microfinance institutions serving the rural poor in East Africa.