Six microfinance organizations based on four continents recently formed a coalition, called Propagate, to encourage the financing of small-scale farmers to help them improve their productivity and access to markets by (1) lowering economic barriers to entry; (2) enabling growth of financial services for smallholders; and (3) creating commercial and operational partnerships. The founding coalition members are Netherlands-based Agora Microfinance; Bangladesh-based development organization BRAC; for-profit Kenyan microlender Juhudi Kilimo; One Acre Fund, an NGO serving farmers in four African countries; US-based Opportunity International and UK-based VisionFund International.
Simona Haiduc, the Vice President of International Business Development at Opportunity International, said, “We know that when smallholder farmers in sub-Saharan Africa have access to production credit, savings accounts, cash flow management tools, and quality extension services, they can significantly increase their productivity and yields and receive fair prices for their crops [1].”
Tanmay Cheetan, a Co-founder and Managing Partner of Agora Microfinance, said, “The sheer magnitude of the existence of poverty amongst smallholder farmers makes it one of the biggest economic challenges of our times. As we know, finance is an integral part of any solution that is attempted [1].”
By Jason Wei, Research Associate
About Agora Microfinance
Agora Microfinance NV is a holding company that creates and supports microfinance institutions (MFIs) in frontier markets with the mission of maximizing “social returns,” while realizing a financial return for the company’s investors and partners. Agora works as an “operator-investor,” placing equity in MFIs and then engaging them in both strategy and execution. As of 2016, is affiliated with MFIs in Cambodia, India and Zambia. Headquartered in Amsterdam, Agora is managed by Agora Microfinance Partners LLP of London.
About BRAC
Established in 1972 as the Bangladesh Rehabilitation Assistance Committee, BRAC is a development organization based in Bangladesh. BRAC’s initiatives include microfinance, advocacy, food security, community development, water and sanitation, disaster relief, social enterprises, and human rights efforts. In 2015, BRAC had an annual expenditure of USD 932 million, with 4.8 million borrowers.
About Juhudi Kilimo
Juhudi Kilimo is a for-profit Kenyan microlender that started operations in 2004 as an initiative within the Kenyan nonprofit organization K-Rep Development Agency. It provides agricultural asset insurance, start-up capital for agribusinesses and loans to small-scale farmers to purchase “productive” agricultural assets. As of the quarter ending in June 2014, Juhudi reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 9.4 million, a gross loan portfolio of USD 6.6 million outstanding to approximately 18,000 borrowers, return on assets (ROA) of -14 percent and a return on equity (ROE) of -89 percent. Juhudi does not accept deposits.
About One Acre Fund
One Acre Fund works to empower families in East Africa to lift themselves out of hunger and poverty by offering services such as financing for farm inputs, distribution of seed and fertilizer, training on agricultural techniques and market facilitation to maximize profits from harvest sales. In 2014, One Acre Fund loaned USD 19.7 million to cover 74 percent of farmer’s field expenses, with 99 percent of farmers repaying their loans in full.
About Opportunity International
Founded in 1971, Opportunity International is a nonprofit organization that provides loans, savings, insurance and training to 12 million individuals in 28 countries in Africa, Asia, Europe and Latin America as of 2016. Based in the US city of Chicago, Opportunity International also has administrative offices in Australia, Canada, Germany, Hong Kong, Singapore, Switzerland and the UK. In 2014, opportunity international had an annual expenditure of USD 51.5 million.
About VisionFund International
VisionFund International, a US-based nonprofit organization, offers financial services to families living in poverty in the developing world through a network of microfinance institutions in 32 countries in Asia, Africa, Latin America and the Caribbean, the Middle East and Eastern Europe. Its services include small loans and business training and support. VisionFund is part of US-based World Vision, a Christian relief, development and advocacy organization. As of 2015, VisionFund has a loan portfolio of USD 474 million outstanding to approximately 1 million borrowers.
Sources and Additional Resources
[1] Propagate, http://www.propagatecoalition.org/
MicroCapital Universe Profile: Agora Microfinance
MicroCapital Universe Profile: BRAC
MicroCapital Universe Profile: Juhudi Kilimo
MicroCapital Universe Profile: One Acre Fund
MicroCapital Universe Profile: Opportunity International
MicroCapital Universe Profile: Vision Fund International
MicroCapital Universe Profile: World Vision
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