Businesses that cater to the poor – through provision of goods, services and market access –  have a crucial role to play in eradicating poverty. To support such businesses, Voxtra has established the Voxtra East Africa Agribusiness Fund. This Fund will invest growth capital in commercially viable but capital-constrained agribusinesses that reach out to smallholder farmers.

The Fund had its first closing on November 9, 2011, at NOK 65 million (approximately USD 12 million). A second closing is considered for 2012. Among the shareholders are institutional investors such as Norfund, Grieg International and Kavlifondet, as well as private individuals in Scandinavia. Norfund, the government-owned development finance institution, is the anchor investor with a 35% share.

The Fund will invest in 10-15 small and growing enterprises in East Africa that provide improved inputs, processing capacity or market access to smallholder farmers. With a backdrop of high growth rates and increased political stability, Voxtra finds the region’s agribusiness sector both an attractive investment area and an effective means of addressing serious shortcomings in smallholder farmer livelihoods. Voxtra’s investments are expected to significantly strengthen the incomes and food security of more than 200,000 smallholder farmers.

 

Why agriculture?

A majority of the world’s poor rely on smallholder farming for their livelihood. In Sub-Saharan Africa, the naked facts are:

• Agricultural yields are only 25% of the global average

• Fertilizer use per hectare is one seventh of in South Asia

• Only 4% of farmland is irrigated

• Most smallholder farmers rely on their own saved-up, low-yield seeds

As a result, smallholder farmers as a group are prone to poverty, hunger, malnutrition and disease.

Across East Africa, a large number of commercially viable agribusinesses cater to smallholder farmers. Patient, risk-tolerant capital and technical assistance are required for these businesses to grow. Voxtra aims to provide both.