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Uganda investment forum 2013 agribusiness - john magnay

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  • 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. 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. 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. 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. Client Access in Rural Areas » Branches » Kiosk Banks » Container Banks » ATMs » Point of Sales » Mobile Banks » Mobile Phone » Village Loans Officers 5
  • 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. 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. Smallholder Farmers SAIL Sugar Mill in Kaliro, E Uganda » Private Investment by Alam Group » 25km impact » 100% Outgrowers » Partnership Investor / Farmers / Banks 8
  • 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. 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. 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. Rural Finance in Africa It’s Our Opportunity 12

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