Alterfin

Debt : July 2020

Alterfin is a Belgian financial cooperative created in 1994 to invest in smallholder farming in developing countries via microfinance institutions, small and medium-sized enterprises (SMEs) and producers' organisations.

Amount

€ 3,000,000.00

Type of investment

Debt

Development impacts

  • Private sector consolidation/innovation
  • Financial inclusion
  • Food security & rural development
  • Promotion of ESG best practices
  • Gender

Beneficiary locations

Asia: Cambodia
Latin America and Caribbean: Nicaragua
Sub-Saharan Africa: Côte d'Ivoire, Kenya

Investment field

Financial Institutions

Activity

Non-Bank Financial Instititution

Organisation

Alterfin

Domicile

Belgium

More investments in

Alterfin

Alterfin’s goal is to improve the livelihoods and living conditions of socially and economically disadvantaged people and communities, predominantly in rural areas in low and middle-income countries;

Alterfin is particularly committed to finance the “missing middle” by offering smaller loans (EURO 336,000 on average- being 30% lower compared to peers) to cover working capital needs of sustainable small agriculture project “SA” active in 14 value chains. To MFI’s, Alterfin provides loan mainly1 in local currency. The organization is also firmly rooted to a familial, sustainable and Fairtrade farming since 76% of investments in sustainable agriculture are certified organic and 73% fair trade;

Development impacts

  • Private sector consolidation/innovation

    Alterfin serves smallholder farmers and cooperatives that have been underserved so far (missing middle) and that crucially need financing in form of trade, harvest finance to stabilize their income streams.

    Alterfin is an established partner of BIO with experience working with MFIs and a focus on rural populations.

    Alterfin provides technical assistance through a TA facility to enhance the investees' productivity, support certifications and improve governance. Alterfin also manage TA facility from third party fund where it acts as fund manager.

  • Financial inclusion

    Financing Agri-focused MFIs is one of the three investee types of Alterfin which can invest up to 65% in MicroFinance Institutions active in the agri space.

  • Food security & rural development

    Alterfin's focus on sustainable and fairtrade certifications ensures that farmers receive a premium on their produce, insuring them against fluctuations in the world prices and providing sustainable incomes. 73% of agriculture partners are certified fair trade, 76% organic. Certification can however be costly for smallholder and not profitable when products are sold on local market (10% target of portfolio), Alterfin is then watching mosly for sustainability rather than certification itself.

  • Promotion of ESG best practices

    73% are fairtrade and/or sustainable certified or in the process of obtaining the certification. Certification can however be costly for smallholder and not profitable when products are sold on local market (10% target of portfolio), Alterfin is then watching mosly for sustainable practice rather than certification itself.

    73% are fairtrade and/or sustainable certified or in the process of obtaining the certification. Certification can however be costly for smallholder and not profitable when products are sold on local market (10% target of portfolio), Alterfin is then watching mosly for sustainable practice rather than certification itself.

    Fairtrade Standards encourage democratic leadership, administrative efficiency, transparent accounting and improved governance.

  • Gender

    Focus on MFI targeting poorer population (in which women). 66% of beneficiaries are women in microfinance, 25% women in agriculture

    STAFF : 42% women.
    3 out of 8 board members are women.
    2 out of 3 managers are women.

Made possible through this investment

Thanks to the direct funding from BIO, the following second-line investments have been made possible.

Chamroeun

Cambodia

Chamroeun is a microfinance institution (MFI) in Cambodia. It grants micro-loans to about 50,000 people, 85% of whom are women. Chamroeun targets the most disadvantaged and issues tiny micro-loans: the average loan is EUR 160.

Divisoria

Peru

The Divisoria Coffee Producers' Cooperative offers fair-trade and organic cocoa and organice fertilisers.

Ecookim

Côte d'Ivoire

This union of eight Ivorian cocoa cooperatives numbers more than 2,800 farmers. The main target of Ecookim is selling cocoa beans along with its mission to increase farmers' incomes and improve the position of small farmers in the cocoa sector. The organization groups its purchases of inputs (fertilizers, pesticides, bags, etc.) and services (transport, treatment plant, etc.). The union also provides operational support to cooperatives and technical assistance to producers.

Vert Ltd

Kenya

Vert is a Kenyan business that exports fresh fruit and vegetables to Europe. Vert has introduced a more sustainable model, working directly with small, local farmers who are organised in small groups. Vert provides farmers with technical assistance to improve the quality of their products and ensure that they are better equipped to deal with any problems that arise. Finally, Vert takes care of the ‘fair trade’ and ‘global gap’ certification (standard criteria for exporting fresh fruit and vegetables to Europe) for the products it exports.

FDL

Nicaragua

‘Fondo para el Desarrollo Local’ , or FDL, is a Nicaraguan microfinance institution (MFI) that has been granting since 1997 microcredit facilities in rural areas where there were no financial services available to the local communities. FDL’s clients are small businesses, small traders and service providers, mainly run by women (54%) living in rural areas.

Musoni

Kenya

Read impact and news about this project

EDFI AgriFI and BIO contract €6M with Alterfin

News

EDFI AgriFI and BIO contract €6M with Alterfin

17-08-2020

EDFI AgriFI and BIO each commit to finance the equivalent of EUR 3 million in USD to reinforce Alterfin’s sustainable agriculture and microfinance portfolios. The combined investment will provide Alterfin with long-term financing to support its expansion in Africa, Latin-America and Asia. The financing from BIO will likely also be accompanied by technical assistance, a first for Alterfin.

Read more

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