Need investment? Here’s what we look for in an agribusiness

/ Thu, 09/21/2023 - 16:47

Our 23rd Call For Proposals is now open. That means we want commodities businesses that aim to expand the positive impact they’re having on their local communities to apply for our investment.

As a UN affiliated international financial organization that serve its 101 member states, our priority is impact, not profit. We aim to reduce poverty by supporting smallholder farmers and local agribusinesses to thrive in a sustainable way.

we are committed to serve our 101 member states and as such we are here for impact, not to make profit. We aim to create a nexus between smallholders and local businesses (SMEs) for alleviation of poverty and thereby place them on the road to prosperity following the sustainability roadmap.

We had an amazing response to our previous funding round, receiving more than 200 proposals. We’re working hard to increase the funds we have available so that we can provide financing to a greater number of businesses that need our support.

We also want to encourage more organisations that are in a strong position to qualify for our financing to apply. With that in mind, here are some useful questions and answers to read through before you get started on the application process.

Is your business activity in a country we invest in?

We invest in businesses that are either in one of our 101 member states or will be carrying out the activities we fund in a member state. Click here to read through the full list. Although we can provide financing to businesses in any of those countries, our priority is to invest in developing countries where we will have the biggest impact on people with the lowest incomes.

Are commodities a key part of your work?

As our name – the Common Fund for Commodities – suggests, we specialise in investing in businesses that trade, produce or process commodities. We’ve financed activities connected to more than 40 different types of commodity, mostly in the agricultural sector, from bamboo and bananas to timber and tropical fruit.

We’ve helped agribusinesses access new markets and increase revenues by enabling them to, for example, build processing capacity, add value to products, develop reliable networks of smallholder farmer suppliers, embed climate resilience and construct vital infrastructure.

Does your business generate a positive impact?

This is key to our investment decision making. Our fundamental mission is to alleviate poverty by boosting economic opportunity. It’s the reason we focus on agribusiness’s that work with smallholder farmers in developing countries, because they are some of the poorest people in the world. That’s why we invest in businesses whose growth will support smallholders to increase their incomes and help the wider community tackle issues that are holding people back from fulfilling their potential.

Increasingly we are also keen to fund businesses that help farmers to grow their crops in more sustainable ways. We want them to become resilient to the impacts of climate change while contributing to improving the environments they farm in. This is demonstrated through our investments in companies such as Kennemer and Colcocoa.

Are you working towards the Sustainable Development Goals (SDGs)?

The SDGs are 17 targets the UN aims to hit by 2030, that are designed to increase peace and prosperity across the globe. We focus on six of them:

1 – No Poverty

2 – Zero Hunger

5 – Gender Equality

8 – Decent Work And Economic Growth

10 – Reduced Inequalities

13 – Climate Action

If you can highlight your contribution to any or all of these, it will help us understand how our investment will boost your ability to make the positive impact mentioned above. This list is , however, not exhaustive and feel free to highlight if you have significant impact on any of the 17 SDGs.

Have you identified a market opportunity?

We’re an impact investor, we aim to finance businesses that will both have a positive impact and generate a return on our investment. Often this means we back companies that have identified a market opportunity, which they need financial support to take advantage of.

For example, is there local demand for an added-value product but you need investment to build a processing facility? Or could your product tap into international markets for ethical products if you could afford traceability technology?

If you can show us there is a genuine economic opportunity to grasp, we’ll be more likely to take your proposal forward.

Are you an established organisation?

We partner with established small and medium sized enterprises (SMEs) that work with, or want to start working with, smallholder farmers and have a track record of at least three years trading, producing or processing commodities. They have demonstrated the viability of their business models, created strong revenue streams and are keen to take the next step forward.

We do not, therefore, invest in start-up companies at this time.

What kind of financial support are you looking for?

We offer three kinds of financing:

A loan for up to 5 years, tailored to the financial needs of your business.
Equity, in which we invest in a share of your business up to a maximum of 49%.
A fast-track loan, that quickly addresses short-term challenges.

For businesses seeking a standard loan or equity investment we’re able to provide financing of between USD 500,000 and USD 2 million. Fast-track loans range from USD 50,000 to 300,000. We’ll design our financing so that it is right for your needs and will always make sure it is as affordable as possible. We do not provide grants or give donations.

If you’ve read this article and think your agribusiness would benefit from our support, we would love to hear from you. To find out how to apply for our investment and for more details about the process click here.

We also hosted a webinar recently, providing a step-by-step guide to the application process.