CFC invests USD 800,000 for a vertically integrated vanilla value chain in Uganda
The CFC has extended a USD 800,000 trade finance loan to Ugandan business Enimiro to upscale its inclusive sourcing model providing farmers improved access to markets and secure incomes. Founded in 2019, Enimiro is an organic certified exporter of vanilla, coffee and dry fruits. The company has built a unique integrated farm-to-fork model based on full digital traceability and monitoring software to allow for pricing transparency and data for certification in the smallholder farming sector. The CFC fund for Enimiro is aimed at expanding their production while establishing full traceability so that smallholders could significantly increase their farm gate income.
Vanilla is the second most expensive spice in the world, after saffron, due to highly labor-intensive methods of cultivation and dependency on a few producing countries. Bourbon vanilla, the most popular cultivated variety, is mainly produced by smallholder farmers. Worldwide vanilla production is dominated by Madagascar, but Uganda is an emerging vanilla market exhibiting strong growth rates in recent years. Yet, the high level of dependency on a few countries, diseases and climate change effects leave vanilla farmers vulnerable to major supply and quality deficits and continued price volatility.
Enimiro’s integrated business model relies on accessible, transparent and secure pricing and offtake volumes for both the farmers and its customers. Key customers are co-investing in its traceability system and have agreed upon a transparent pricing setting structure and minimum volume guarantees. This creates a win-win enterprise for all actors in the chain: farmers have access to markets, support services and benefit from transparent pricing and price premiums, while customers are committed to developing long term engagement with smallholder farmers meeting sustainability standards.
Enimiro’s network of 15 dedicated extension officers collect data, ensuring compliance and agronomy as well as trainings to over 2,000 farmers. Farmers have access to a financial inclusion program including bank accounts and affordable micro-finance to facilitate agricultural inputs. The company has built local collection points for green vanilla, reducing concerns of contamination while increasing quality assurance. These collection points also act as agro-hubs, which enable the commercialization of various products at each collection point like fruit, vanilla and coffee. The company is also periodically training farmers introducing the agroforestry concept of intercropping – an approach that can support farmers with more resilience, diversified income and cross benefits without increasing the production land used.
Enimiro envisions to create a resilient vanilla market through the development of a vertical transparent supply chain. CFC’s trade finance facility will accommodate its growth ambitions in traceability and inclusive sourcing, which is expected to revive Uganda as a high-quality origin of vanilla and improving livelihoods of over 5,000 farmers in the coming years.
CFC Managing Director, Ambassador Sheikh Mohammed Belal, welcomed this new partnership as he stated: “At the CFC we always look for businesses integrating technologies to create fair value chains. Enimiro is the ideal case in point. It is great to be part of a journey where we can not only contribute to the traceability of the vanilla value chain, but also help communities in an LDC to build resilience. Looking ahead, we hope to see more examples with an entrepreneurial vision prioritizing quality and transparence – and this by embracing technological developments for full traceability.”
Enimiro Managing Director, David Wright added: “Enimiro’s focus is on providing market security for smallholder farmers and a transparent supply chain for our customers. The CFC has a shared vision in the benefits on promoting a sustainable and transparent supply chain. We are excited to have CFC as a partner to expand our farmer reach as well as the intangible benefits of the advice they have provided through the due diligence process.”