MICROCAPITAL BRIEF: FMO Invests $7.5m in Acumen Resilient Agriculture Fund to Finance Early-stage Enterprises in Africa

The Netherlands Development Finance Company, which is also known by its Dutch acronym FMO, recently invested USD 7.5 million in the Acumen Resilient Agriculture Fund (ARAF), an entity of US-based NGO Acumen, to increase the financing of early-stage agribusinesses in East and West Africa. The goal of ARAF is to support farmers affected by climate change.

The director of agribusiness at FMO, Pieternel Boogard, said of the deal, “Reducing carbon emissions is not enough to reduce the impacts of climate change. There is an increasing need to invest in climate adaptation projects and the climate resilience of our (end-)clients, i.e. smallholder farmers. That is why we are proud to partner with Acumen in this innovative fund that aligns well with our strategy to invest in climate smart agriculture as well as enhance food security, support sustainability and promote inclusive development.”

Acumen is a nonprofit venture funding organization based in the city of New York. It was founded in 2001 with seed capital from the Rockefeller Foundation, the Cisco Systems Foundation and individual philanthropists. Acumen uses charitable donations to invest debt and equity in companies, entrepreneurs and concepts that promote the alleviation of poverty. It focuses on early-stage investments in providing low-income customers access to healthcare, water, housing, alternative energy and agricultural inputs. Commitments generally range from USD 300,000 to USD 2.5 million per investee with an expected payback horizon of five to seven years. As of 2018, Acumen had total assets of USD 137 million. In addition to the US, Acumen has offices in Ghana, India, Kenya and Pakistan.

Established in 1970, FMO is 51-percent held by the Dutch government and 49-percent by private sector institutions. The bank works toward the UN’s Sustainable Development Goals by funding capacity development as well as placing debt and equity investments in sectors such as agribusiness, financial institutions and energy. As of 2018, the bank reported a portfolio of EUR 9.6 billion (USD 10.8 billion).

Sources and Additional Resources

FMO press release
https://www.fmo.nl/news-detail/82f3da5e-3df3-4f23-b669-c44a739f32a5/investing-in-smallholder-farmer-climate-resilience

FMO homepage
https://www.fmo.nl/

FMO 2019 annual report
https://annualreport.fmo.nl/2018/reports/ir2019/at-a-glance

Acumen homepage
https://acumen.org/

Acumen 2018 annual report
https://acumen.org/wp-content/uploads/Acumen-2018-Annual-Report-LRP-edited-2019.5.16.pdf

MICROCAPITAL BRIEF: FMO Loans $10m to DRC Arm of Nigeria’s Access Bank for SME Lending
https://www.microcapital.org/microcapital-brief-fmo-loans-10m-to-drc-arm-of-nigerias-access-bank-for-sme-lending/

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