Brief description of the client and project
Fairtrade Access Fund S.A., SICAV-SIF (“FAF”) is an impact fund created in 2012 that address the financial needs of smallholder farmers by providing better access to financing, including long-term capital and to sustainable markets, both locally and abroad.
FAF contributes to the development of a fair and sustainable agriculture sector by offering its lending products to agricultural companies who works primarily with organizations of smallholder farmers and have a strong commitment to sustainable development, through Fairtrade and sustainable certifications. FAF is managed by Incofin Investment Management, a Belgium-based fund management company with a mission to invest in companies that increase financial inclusion. Incofin has a proven track record in sustainable investing in the area of microfinance and agribusiness in partnership with organizations experienced in agriculture and smallholder finance (Fairtrade International, KfW, Grameen Foundation).
AgriFI will invest up to EUR 5 M in Class A equity, ie as a long term investor (+7 years) in order to:
1/ contribute to increase the size of the Fund portfolio to benefit a larger number of smallholder farmers engaged through their organizations in sustainable agriculture. It will also support the expansion of the Fund toward Africa
2/ /attract more senior finance by securing the Fund financial stability thanks to increased equity in the Fund: both private investors, subscribing to more liquid B-Shares, as well as long term lenders.
Why AgriFi wants to fund this project:
The Fund has a clear development impact for smallholder farmers, by enabling them to invest in their land to raise crop yields, improve quality and get a fair return. Beyond the certifications’ advantages, including the premium, having the FAF as a trade financing partner, greatly improves the bargaining power of the investees, mainly producer’s organisations.
Environmental and social rationale:
The Project is rated category B. The overall portfolio risks include a limited number of business activities that have potential medium level adverse environmental or social risks or impacts that are few in number, generally site specific, possibly reversible, and readily addressed through mitigation measures. FAF will be required to formalise the current processes and procedures used for assessing and mitigation of E&S risks.
IFC Performance Standards 1 to 4 are expected to be triggered by the portfolio investees’ activities.
The information as disclosed is indicative and provided on an “as-is/as available” basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of AgriFIin its sole and absolute discretion.
In case of questions
This approved investment is online for 30 days. In case of questions,