Uganda investment forum 2013 agribusiness - john magnay

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Uganda investment forum 2013 agribusiness - john magnay

  1. 1. Opportunity International Smallholder farmers an un-tapped resource CBC Uganda Investment Forum 11-12th April 2013 John Magnay Senior Agricultural Advisor, Africa 1
  2. 2. Opportunity International » Founded in 1971 in South America » Originally an NGO providing micro loans » Developed regulated micro finance institutions in 22 countries in Central & South America, Africa, Asia and Eastern Europe. » Targeting bottom of the pyramid » Commence Rural Finance in 2007. » Rural Clients…… – 65% of African Population – Majority of the Poor – Majority of the Malnourished – 40% Efficient use of Land and Labour – Loss 50% of Gross Income to Income Smoothing 2
  3. 3. Why Rural Finance » 65% of African Population » Majority of the Poor » Majority of the Malnourished » 40% Efficient use of Land and Labour » 50% of Gross Income LOST to Income Smoothing » Loosing Youth to Urban Migration 3
  4. 4. Opportunity Africa Rural Finance coverage Uganda 2009 Ghana 2014 Ghana 2009 Kenya 2013 DRC 2013 Rwanda 2010 Tanzania 2013 Malawi 2007 Mozambique 2009 South Africa 2015
  5. 5. Client Access in Rural Areas » Branches » Kiosk Banks » Container Banks » ATMs » Point of Sales » Mobile Banks » Mobile Phone » Village Loans Officers 5
  6. 6. Production Finance within the Value Chain Opportunity will engage at any level of the Value Chain ..but… Production Finance can have the greatest impact on annual rural household income 6
  7. 7. The Rural Model OUTPUT MARKET Strategic Links Contract / Auction / Trader Microfinance Market Information Systems Savings / Loans / Transfer Insurance products Farmer Farmers Groups Infrastructure Input Supplier/s Seeds/Tools/Ferts/ Chems Extension Services •Technical Support •Research & Development •Communications •Power •Roads •Water 7
  8. 8. Smallholder Farmers SAIL Sugar Mill in Kaliro, E Uganda » Private Investment by Alam Group » 25km impact » 100% Outgrowers » Partnership Investor / Farmers / Banks 8
  9. 9. SAIL Sugar Plant – phase 1 » » » » $ 40 million Investment by SAIL in Sugar Plant 300 direct employees at the SAIL site on 3-shift basis 3,500 Farmers producing Cane on 15,000 acres $15 million investment in Sugar Cane production 3,000 farming families with external labour and contracting services » 400,000mt cane / 40,000mt sugar / Molasses / Surplus Power 6-8 megawatts – per year » Phase 2 will increase production by 50% 9
  10. 10. Spin-off Impact – per year » » » » » » » » $ 2.5 m investment in Seed Cane 80-100 Tractor hire services 1000 people employed weeding 750 people employed harvesting 150 Trucks delivering cane $ 20m worth of Cane Sold per year +/- $ 4m profit to farmers from activities Majority of Expenditure in local area 10
  11. 11. The Opportunity » Smallholder Farmers are looking for the Opportunity to produce a saleable crop. » They need Technical Support to achieve commercial yields and quality products. » Farmers and Land is not an issue However » Offer then a fair deal – incomes of $1000s not $ 100s » Provide the right level of Technical Support so that Financial Support can engage. » Need a Return to All Costs including Labour to be Sustainable 11
  12. 12. Rural Finance in Africa It’s Our Opportunity 12

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