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Acumen Fund and Grameen Foundation Invest in Agricultural Microfinance Company, Juhudi Kilimo Company Limited

Investment to Provide Kenyan Smallholder Farmers Access to Loans for Agricultural Assets

Nairobi, Kenya, May 10, 2011 – Acumen Fund, a nonprofit global venture firm addressing poverty in South Asia and East Africa, and Grameen Foundation, a global non-profit serving the world’s poor through microfinance and technology, today announced a $1.75 million quasi-equity co-investment in Juhudi Kilimo Company Limited (Juhudi Kilimo). Juhudi Kilimo is a microfinance company in Kenya that provides loan products to smallholder farmers for productive agricultural assets. The Acumen Fund and Grameen Foundation co-investment of $1.2 million and $550,000, respectively, will help Juhudi Kilimo grow its portfolio and serve more farmers, hire new staff, and improve its efficiency across its seven branches.

“After a decade of investing patient capital in companies providing innovative solutions to poverty, Acumen Fund has learned that people want choice, not charity, an opportunity to better their own lives and communities, which is exactly what Juhudi Kilimo provides through its products and services for smallholder farmers,” said Jacqueline Novogratz, CEO, Acumen Fund.

“Grameen Foundation remains committed to expanding access to financial services for the poorest people, and we are pleased to support Juhudi Kilimo’s pioneering work with smallholder farmers working in Kenya’s remote rural areas,” said Alex Counts, president and CEO of Grameen Foundation. “We also applaud it for adopting the Progress out of Poverty Index, a social performance tool that will provide its management and stakeholders with valuable information on the clients it is reaching and changes in their economic well-being over time.  We are also pleased to partner with Acumen Fund, since joining forces with like-minded, entrepreneurial social change organizations is our preferred approach.”

Agriculture is the backbone of Kenya’s economy, with nearly 80% of the population (30 million people) deriving their livelihoods from farming. Meanwhile, average landholding in the country continues to shrink, with Kenya’s average farm size now less than 2.5 hectares. The key to economic growth for Kenya’s smallholder farmers is access to productive agricultural assets, but 36% of rural Kenyans have no access to any form of financial services. Without appropriate financing, these productive assets are often out-of-reach. Juhudi Kilimo’s financing products enable farmers to access high-quality agricultural assets, such as improved breeds of dairy cows that can produce at least four times more milk per day than local dairy cows in Kenya. This improved productivity has the potential to increase household productivity by $600 annually.

“Juhudi Kilimo provides financing to smallholder rural farmers organized in groups to purchase productive agricultural assets, such as dairy cows and other livestock, irrigation equipment, and greenhouses,” said Aleke Dondo, Founder and Board Member, Juhudi Kilimo. “By financing income-generating assets, paired with targeted business and agricultural training, we help to build and sustain rural enterprises that create jobs and deliver greater market access and new services to these communities.”

Juhudi Kilimo plans to increase its client base from 7,322 in March of 2010 to over 25,000 by the end of 2015, aiming to improve the lives of nearly 125,000 rural Kenyans. The company began in 2004 within the K-Rep Development Agency (KDA) to target the underserved rural farmer market untouched by other K-Rep Group companies. Success of the asset financing program led KDA to explore spinning off the line into a new company, which was formally founded on 1 April, 2009 as Juhudi Kilimo.

“Agriculture-specific financing is relatively new to rural Kenya, but an important area of investment in a country where the vast majority of the population rely on agriculture to sustain themselves,” said Biju Mohandas, East Africa Director, Acumen Fund. “Acumen Fund’s investment in Juhudi Kilimo will expand our current agricultural portfolio and provide additional insight into agricultural finance, which we can then share with the rest of the region and world.”

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