The coronavirus pandemic has dramatically disrupted life and economic activity around the world. Lockdowns and social restrictions have forced businesses to close or scale down considerably. With a second wave of the pandemic now underway, it is hard to imagine a return to pre-COVID-19 normalcy anytime soon.
Yet, social needs must continue to be met if people and communities are to weather this crisis. As an impact-first investor, FINCA Ventures understands that times like these require doubling down on support to the social enterprises that are critical to securing livelihoods and strengthening resilience for families and small businesses. Now, perhaps more than ever, social enterprises are needed for their creative and innovative solutions.
Therefore, despite the challenges, FINCA Ventures continued to make new investments. After adapting its due diligence process to leverage technology to remotely assess new investment opportunities, FINCA Ventures was able to onboard a new partner, YYTZ, despite the pandemic.
YYTZ works to increase incomes for smallholder farmers growing cashews in Tanzania, the fourth-largest producer of the crop globally. The company has invested in cashew shelling machinery that can be operated by community members and built connections directly with retailers to avoid middlemen who cut into farmers’ profits. This means YYTZ can pay a 50 percent premium for semi-processed cashews to the 4,700 smallholder farmers and women’s groups it works with. YYTZ then processes the cashews into a variety of retail-ready products for the East African market.
Support to social enterprises providing agricultural solutions has broad impact as agriculture is the primary source of livelihood for most people in the countries where FINCA Ventures operates. In Zambia, Good Nature Agro remains undaunted by the pandemic and continues to deliver on its mission to lift farmers out of poverty and into the middle class. FINCA Ventures recently increased its support to this legume-focused social enterprise to enable it to build up its processing infrastructure, scale its full-farm extension services for smallholders, and connect its farmers to larger food processors. This year, Good Nature Agro will be able to support 15,000 farmers.
Beyond agriculture, FINCA Ventures provided additional support to Sanivation. The company’s waste-to-energy solution is helping the city of Naivasha in Kenya deal with the sanitation needs of its nearly 200,000 residents, and its services have been designated as essential during COVID-19 by the government. This unique public-private partnership provides a model for other cities in sub-Saharan Africa, a region where less than one-third of the population has access to basic sanitation services. Sanivation continues to gain global recognition as an innovator building a future for sustainable water and sanitation.
These investments demonstrate FINCA Ventures’ commitment to an impact-first approach. The COVID-19 pandemic has only served to strengthen its resolve to continue supporting companies with solutions that make a difference.