Status update — April 15, 2016

Kiva and AgDevCo have mutually agreed to end their partnership after 2.5 years and $25,275 in loans raised to support 13 farmers in selected regions of Mozambique by providing funding for their farm inputs and other related costs. This decision was reached by both parties on realization that  Kiva’s lending model could not be sustainably accommodated within AgDevCo’s current operational framework.

Partner Description:

Africa Agricultural Development Company (AgDevCo) is a nonprofit venture capital organization devoted to creating successful agribusinesses in low-income countries. By investing in agribusinesses, AgDevCo enables them to grow large enough to attract other private investments from domestic and overseas organizations. 

By taking a hands-on development role – including identifying projects, responsibly securing access to land, organizing smallholder farmers and linking them to markets – AgDevCo removes many of the front-end development costs and risks that deter private investment in African agriculture. After identifying promising agriculture projects, AgDevCo then provides technical assistance and raises third-party capital from Development Finance Institutions (DFIs) and private investors to finance both small- and large-scale development costs. 

Agriculture is one of Africa’s best routes for boosting economic growth and reducing poverty, as large areas of the continent have a suitable climate, abundant land and access to major water resources. Mozambique is considered one of the countries in sub-Saharan Africa that has tremendous agricultural potential. 

A unique lending approach 

Through one of its main projects, AgDevCo aims to provide finance and extension services to identify, educate and ultimately help leading agricultural students graduate to commercially sustainable farmers. The organization is currently using a business-driven model to give local students the opportunity to prove they have the motivation, skills and capacity to farm on a commercial scale. Their target clients are male and female agricultural students in the Chimoio region of Mozambique who enrolled in agriculture courses to pursue careers in this area.         

The funds from Kiva lenders will be used to establish the first small plots for these farmers. Once they achieve success on the smaller plots, these entrepreneurs can grow their plot size through additional funding and eventually lease and manage large-scale blocks, generating even more income for themselves and their families.