Small Farmers, Big Impact: Empowering Business and Community

Small Farmers, Big Impact: Empowering Business and Community
October 21, 2020 6 mins

Small Farmers, Big Impact: Empowering Business and Community

Small Farmers, Big Impact: Empowering Business and Community

In Uganda and Rwanda, hundreds of small farmers are producing coffee and tea but can’t gain access to major international markets to sell their crops.

Key Takeaways
  1. Many small farmers need financing to reach markets — and high interest rates mean that farms are forced to sell their coffee and tea for little or no profit.
  2. Netherlands-based agricultural technology firm Almacena offers the small farmers finance at far more reasonable rates, and ships coffee on their behalf to warehouses in Europe.
  3. Aon's Commodity Industry Practice played a crucial role by providing insurance and connections, helping Almacena focus on making a social impact.

African farmers, a European start-up, and an Aon suite of solutions. How does a global partnership like this empower small business owners and an entire community in east Africa?

In Uganda and Rwanda, hundreds of small farmers are producing coffee and tea but can’t gain access to major international markets to sell their crops. Many small farmers need financing in order to reach these markets – and local interest rates are prohibitively high, in some cases at 20 percent.

This means small farmers are forced to sell their coffee and tea at lower prices and for little or no profit.

Almacena has set out to fix this problem. This Netherlands-based agricultural technology or “agtech” company offers the small farmers finance at far more reasonable rates, and ships coffee on their behalf to warehouses in Europe. From there, the coffee is sold directly by Almacena to European roasters. The profits from the sales go straight back to the African farmers, minus a minimal fixed service fee.

With the help of Aon’s Commodity Industry Practice team, which provided marine cargo insurance, credit insurance, and network connections, Almacena has been able to grow and connect with local co-operatives in Africa.

“The name Aon opens doors more easily for start-ups such as Almacena to the financial industry,” said Walle Romijn, Account Manager of Commodity Trade, and lead for the project, at Aon. “By doing this, Aon is providing these start-ups favorable conditions for risk mitigation and enabling them to concentrate on their core objective: making a social impact.”

20%

Loan rate for many small farmers in East Africa

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The name Aon opens doors more easily for start-ups such as Almacena to the financial industry.

Walle Romijn
Account Manager of Commodity Trade, Aon

Now this operation has been picking up tremendous steam:

  • The University of Cambridge adopted Almacena as one of the companies for their impact competition
  •  The Dutch Good Growth fund invested in the company as an impact project
  •  FMO (the Dutch development bank) awarded Almacena $125,000 in development capital as part of the Finture Solutions awards, honoring startups that bring positive change in global emerging markets

Most important, Almacena can now improve the lives of East African farmers and their communities, with the goal of impacting 800,000 smallholders across East Africa by 2025.

“Our partnership with Aon gave us access to expertise and networks in soft commodities, adding to our credibility as a counterparty both at origin markets in East Africa and in Europe, and providing comfort to our financiers and investors that risks are well understood and managed,” said Dimo Yanchev, CEO of Almacena. “We see Aon’s Commodity team in Amsterdam not just as a business partner but also as part of the wider Almacena team, always available to think alongside, bounce off ideas and offer advice.”

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