Grainpulse, a Ugandan supply chain platform for farmers has raised $11m from IFC and the Private Sector Window of the Global Agriculture and Food Security Program (GAFSP) to strengthen its farmer supply chain, increasing food production and economic growth in the country. This is according to techmoran.com
Grainpulse will use the loan to establish itself as a one-stop-shop for farmers, providing them with multiple services, such as fertilizer blending. The company’s fertilizers are optimized to increase the yields of crops grown by Ugandan smallholder farmers. Grainpulse also buys these crops, including coffee, maize, and barley, from local farmers.
In a statement, Hannington Karuhanga, Grainpulse CEO and Founder, said, “Our partnership with IFC will help Grainpulse move to the next stage of growth. We chose to work with IFC because it takes a long-term view of our partnership and adds value beyond financing, in areas such as farmer linkages. We are aligned with IFC on our goal of supporting Ugandan farmers.”
Utilisation of the funds will include, improving its farmer supply chain, boosting economic & commercial growth via the increase of food production. The target of the company includes emerging as a one-stop-shop , creating multiple services, such as processing, storage & milling and fertiliser blending.
The company also plans to launch an online platform, that will enable farmers to get access to information on good agricultural practices, agronomy and advisory services that aim to facilitate knowledge transfer to support optimal crop yields for smallholder farmers. It will also train retailers on financial management improving their capacity and earnings potential.
Grainpulse Agronomists provide advisory support and training on good agricultural practices.
Weetracker.com states that in September 2018, the company linked up with Savannah and K+S AG, a global potash and salt company headquartered in Germany, forming a joint venture.
Grainpulse claims that the funding and development of its online platform will increase its reach from 36,000 farmers to more than 300,000 by June 2023, EngineeringNews reports.
The Private Sector Window of the Global Agriculture and Food Security Program provides funding to supports projects designed to improve the livelihood of smallholder farmers living in the world’s poorest countries.
Grainpulse was founded by CEO Hannington Karuhanga, the chairman of mobile operator Airtel Uganda.
In a statement, Hannington Karuhanga, Grainpulse CEO and Founder, said, “Our partnership with IFC will help Grainpulse move to the next stage of growth. We chose to work with IFC because it takes a long-term view of our partnership and adds value beyond financing, in areas such as farmer linkages. We are aligned with IFC on our goal of supporting Ugandan farmers.”
Grainpulse, which was formerly known as Savannah Commodities Company, processes and exports coffee, sources and mills grain and cereals from local farmers, and blends fertilizer at its blending plant, the first in Uganda. In September 2018, Grainpulse formed a joint venture between Savannah and K+S AG, a global potash and salt company headquartered in Germany.
Tomasz Telma, IFC’s Senior Director for Manufacturing, Agribusiness and Services, said, “Supporting the agribusiness sector is a major focus for IFC in Africa. This investment in Grainpulse will contribute to food security and economic growth in Uganda by helping increase farmers’ fertilizer use and improving their access to markets.”
What Attracted Investors/Funders?
According to Relief Web, nearly 90 percent of the Ugandan population derives most food and income from small-scale food- and cash-crop agriculture. In the country, agriculture, is the main pillar of the national economy and accounts for nearly half of the gross domestic product (GDP) and nearly three-quarters of exports. Growth in the staple-food sector, however, is falling behind other sectors of the economy, compromising many Ugandans’ food security as well as the country’s ability to sustain its economic growth. The funding from IFC will help change the dynamics.
Agriculture is Africa’s most dominant economic sector, accounting for 15 percent of the continent’s GDP, or over $100 billion annually, according to McKinsey.
Agriculture in Africa has a massive social and economic footprint. More than 60 percent of the population of sub-Saharan Africa is smallholder farmers, and about 23 percent of sub-Saharan Africa’s GDP comes from agriculture. Yet, Africa’s full agricultural potential remains untapped.
M-money services are growing dramatically in sub-Saharan Africa. They offer opportunities to increase access to financial services and ease the flow of financial transactions within agriculture value chains.
Significantly, we are witnessing dramatic growth in Mobile Money and technology (platform) services in Sub-Saharan Africa. Opportunities offered include widening access to financial services and opening channels for financial transactions within the value-chain including smallholder farmers, input suppliers, traders and buyers
Profile of Funder
IFC manufacturing, agribusiness and services senior director Tomasz Telma said: “Supporting the agribusiness sector is a major focus for IFC in Africa. This investment in Grainpulse will contribute to food security and economic growth in Uganda by helping increase farmers’ fertilizer use and improving their access to markets.” IFC through its website, communicates information on private sector solutions for development via smallholder agriculture, with an emphasis on regions where a large majority of farmers operate on less than two hectares of land, such as in Africa.
IFC is focusing on building farmers’ access to: Finance, Inputs & Markets. The Global Agriculture and Food Security Program (GAFSP) is a multilateral fund set up to help the G-20 deliver on its food-security commitments. The private sector part of this fund enables IFC to reach even the smallest farmers and rural enterprises, by blending donor financing with commercial credit.
