Ready for Funding
The ABC Fund invests in entities of the agri-business value chains and in Financial Intermediaries which have the potential to improve livelihoods of farmers in developing countries. We offer debt, guarantees and equity financing.
Financing solutions are provided to the following entities
Cooperatives, farmer organizations and SMEs in underfinanced yet profitable segments of agricultural and agribusiness value chains.
Investment Criteria
Financial intermediaries to further improve access to financial services for smallholders, cooperatives and farmer organizations, as well as agribusiness SMEs.
Investment CriteriaFinancial Instruments
For SMEs and farmer organizations
| Tenor | Indicative Amount Range | |
|---|---|---|
| Working Capital Facilities | Up to 24 months, typical tenor 6-12 months | €200k-400k |
| Term Loans | 3-5 years | €400k-800k |
| Sub-debt / Equity | 5-7 years | €400k-800k |
Funding provided by the ABC Fund is in euros, US dollars and in local currency when possible
For financial intermediary
| Tenor | Indicative Amount Range | |
|---|---|---|
| Term Loans | 3-5 years | €1M-4M |
| Sub-debt / Equity | 5-7 years | €200k-500k |
Funding provided by the ABC Fund is in euros, US dollars and in local currency when possible
READY TO GROW
ABC FUNDREADY TO INVEST
Investment Criteria for SMEs and farmer organizations
Target entities
- producers of primary agricultural products;
- input suppliers such as manufacturers or distributors of seeds;
- companies that produce, maintain or operate storage facilities;
- service companies, traders, veterinarians, mechanization;
- aggregators and/or processors of primary agricultural products;
- logistics companies that transport and handle primarily agricultural goods;
- processors of secondary agricultural goods/ food products.
Social impact criteria
The ABC Fund offers direct funding to projects that have a high social impact by contributing to:
- developing rural employment and supporting income-generating activities for smallholder farmers;
- increasing productivity and commercial performance of economic actors along the food value chain.
Special attention is given to entities that promote innovation and sustainable and resilient agriculture, and meet the highest Environmental, Social and Governance (ESG) standards.
Financial performance criteria
- At least two years of activity
- Revenue: ≥€180,000Collateral coverage: ≥50% of loan amount (including company and other types of collateral)
- EBITDA / total revenue: ≥5%
Investment Criteria for financial intermediaries
Target entities
- traditional banking institutions actively lending to smallholder farmers and agri-SMEs (e.g. agri-banks, microfinance institutions) or seeking to grow their agri-portfolio;
- insurance companies covering the agricultural risks of smallholder farmers and agri-SMEs;
- non-banking financial intermediaries lending to smallholder farmers, cooperatives, savings
- and credit cooperatives, farmers’ organizations, and agri-SMEs;
- fintech and alternative lenders.
Social impact criteria
The ABC Fund targets financial intermediaries with the potential to generate positive impact within the agribusiness value chain by addressing the financing needs of cooperatives, farmer organizations and agribusiness SMEs. Financial intermediaries themselves need to apply the highest ESG standards.
Investment Criteria for financial intermediaries
| SME Banks & Deposit Taking MFIs | Other MFIs &Non-Bank FIs | Fintech & Alternative Lenders | |
|---|---|---|---|
| Years of operations | >=3 years,minimum | >=3 years,minimum | >=1 years,minimum |
| Size | Portfolio size > USD 10M | Portfolio size > USD Sm and/or/ Sales/ Income > USD 1M | Portfolio > USD 1M ,or Disbursements > USD 1M,or Sales/ Income > USD 1M |
| Asset Quality (incl.w/offs) | PAR30 < 15% | PAR30 < 15% | PAR30 < 10% |
| Closing Leverage | Debt to equity < 5x | Debt to equity < 4x For non-regulated financial intermediaries | Debt to equity < 5x For non-regulated financial intermediaries |
| Profitability | 5 - 7 years | € 400K – 800K |
EXCLUSIONS
The ABC Fund’s operations pursue the highest environmental and social standards.
Access Exclusion ListTechnical Assistance
Along with financing, the ABC Fund helps its investees address capacity challenges to develop their business through its Technical Assistance Facility (TAF). The TAF offers technical and advisory services in the fields of business development, extension services, operations, marketing, governance, financial management and other key areas that need strengthening. The aim is both to strengthen the investees’ business and to mitigate risks, including social or environmental risks.
The TA is managed by Agriterra (www.agriterra.org) together with its partners Advance consulting and Rabo partnerships. Together we provide capacity building services to SMEs, financial institutions, cooperatives and farmer organisations. The TAF is only available for investees which (will) receive funding through the ABC fund.